The Bank of England have raised interest rayes to their highest level in fourteen years after they announce this lunchtime that the lending rate is now 3 per cent
That’s the biggest increase since Black Wednesday in September 1992 and it brings interest rates to the highest level in 14 years as it battles the highest inflation in 40 years.
The U.S. Federal Reserve raised its key interest rate by 0.75 percentage points on Wednesday to a range of 3.75% to 4.0%, and the European Central Bank increased its deposit rate by the same amount to 1.5% last week.
The Bank said in a statement that Inflation is too high. It is well above our 2% target and high energy, food and other bills are hitting people hard.
“If high inflation continues, it will hurt everybody. Low and stable inflation helps people plan for the future. Raising interest rates is the best way we have to bring inflation down.
We know that many people are facing higher borrowing costs. In particular, many households face higher mortgage rates. And some businesses face higher loan rates. It’s our job to make sure that inflation returns to our 2% target.”
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