The Bank of England raised the rate to 4.25% due to “lower inflationary pressures”. From the entity they expect retail inflation to fall sharply in the remainder of 2023 despite the surprise rise in February, which registered a rise of 10.4% year-on-year against 10.1% in January, driven by food prices and the clothes.
The Bank of England (BoE) raised its interest rate by 25 basis points on Thursday and took her to 4.25% in the face of “lower inflationary pressures”.
The rise of the English entity occurred in line with the increase implemented on Wednesday by the Federal Reserve from United States.
Bank of England governors voted 7-2 to raise rates to 4.25% and the rationale is around expectations for lower inflation. “If there were signs of more persistent pressures, further tightening of monetary policy would be necessary.
Furthermore, they hope that GDP vary -0.1% in the first quarter and grow “slightly” in the second, which would imply a revision of the previous forecast, when a variation of -0.4% was expected. However, they expect the effect of capping energy prices and the downward trend in wholesale prices to continue.
From the entity they hope that the inflation retail to fall sharply in the remainder of 2023 despite the surprise rise in February, which registered a rise of 10.4% year-on-year against 10.1% in January, driven by food and clothing prices, indicated the National Office of Statistics (ONS) British.
They argue that the February variation reflects the clothing price volatility and it is likely that it will not be persistent over time.
Despite ratifying the implemented increase, the agency assured that they will monitor the “credit conditions” of the country to analyze the impact of updating the rates.
Financial crisis
After the financial crisis Unleashed two weeks ago after the failure of two large banks in the United States and the wobble of the second largest bank in Switzerland, the Bank of England confirmed that the country’s banking system is well placed to support the economy, even despite high interest rates.
Source: Ambito
