Bank of England Raises Interest Rates to 4.5% to Tackle Inflation
23/05/2023

The Bank of England has increased interest rates by 0.25%, reaching 4.5% after a year of consecutive hikes. The policy aims to control high inflation, but its impact on the economy has been delayed, with inflation rates remaining stubbornly above 10% last month. The monetary policy committee voted 7-2 in favor of the rate increase, indicating the possibility of further rises later this year. While the Bank expects inflation to decline, it cautions that food prices may decrease more slowly than other factors. The continuous rate hikes pose challenges for mortgage holders and businesses seeking to refinance, leading to higher loan costs. The fiscal risks to organizations are heightened due to increased borrowing costs, making it harder to maintain cash flow and limiting financial resilience.