Economists expect the Bank of England to raise its key rate to 0.75% after Russia’s war in Ukraine pushed oil prices to their highest level in 13 years earlier this month.

The Bank of England is likely to raise its key interest rate for the third time since December on Thursday, as it makes faster progress than other central banks in fighting a global inflation wave fueled by rising energy prices.

Economists expect the Bank of England to raise its key rate to 0.75% after Russia’s war in Ukraine pushed oil prices to their highest level in 13 years earlier this month. The US Federal Reserve raised its short-term benchmark to 0.25% on Wednesday to contain the worst inflation since the early 1980s. The Fed had left it close to zero since the coronavirus pandemic struck two years ago.

The European Central Bank left its rates unchanged last week but announced an early end to its economic stimulus efforts in a bid to combat record inflation in the 19 countries that use the euro. The Bank of England began raising interest rates in December amid concerns about rising consumer prices as the world began to emerge from the pandemic, boosting industrial demand for energy and raw materials.

Even before the Russian invasion of Ukraine, the Bank of England expected consumer price inflation to peak at around 7.25% in April, more than three times the target of 2%. The Resolution Foundation, a think tank focused on helping low-income families, said last week that inflation could now peak at more than 8.4%, taking inflation to its highest level since 1982. Central banks in other countries may soon overtake the Bank of England. The Federal Reserve has said it will raise interest rates six more times this year.


This post Bank of England likely to raise key interest rate was original published at “https://www.financialexpress.com/economy/bank-of-england-likely-to-raise-key-interest-rate/2464169/”

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