Newsonline reports that the Bank of England boosted interest rates to 1%, the highest level since 2009, to combat rising inflation.
This, Newsonline Nigeria understands was disclosed in the monetary policy summary released today.
The nine MPC members at the Bank of England voted 6-3 in favour of a quarter-point increase from 0.75 percent. However, Catherine Mann, Jonathan Haskel, and Michael Saunders advocated for a larger rise to 1.25 percent to prevent the inflation spike from being rooted in the economy.
The Bank said, “At its meeting ending on 4 May 2022, the MPC voted by a majority of 6-3 to increase Bank Rate by 0.25 percentage points, to 1%. Those members in the minority preferred to increase Bank Rate by 0.5 percentage points, to 1.25%”
The bank added that its hawkish stances would be accompanied by the selling of UK bonds. BoE said, “As Bank Rate is now being increased to 1%, and consistent with the MPC’s previous guidance, the Committee will consider beginning the process of selling UK government bonds held in the Asset Purchase Facility.“
The report added, “The Committee’s updated central projections for activity and inflation are set out in the accompanying May Monetary Policy Report. The projections are conditioned on a market-implied path for Bank Rate that rises to around 2½% by mid-2023, before falling to 2% at the end of the forecast period”
Bank of England Governor, Andrew Bailey said at the press conference that most members of the MPC “judge some further tightening of monetary policy might be appropriate,” and the uncertain outlook led to a range of views on the committee
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