London, Thursday, 3 February 2022
During its February 2022 meeting, the Bank of England raised its main Bank Rate by 25 basis points to 0.5 percent, as expected. Although four policymakers voted for an even higher 50bps rate hike, it is the first back-to-back boost since 2004, raising borrowing costs to their highest level in two years.
The Committee also agreed to stop reinvesting maturing assets in order to reduce the stock of UK government bond purchases financed by central bank reserves.
Inflation is expected to rise further in the next months, reaching close to 6% in February and March, before peaking at roughly 7.25 percent in April, before falling down to just above the 2% objective in two years.
Further tightening would be reasonable in the coming months, according to policymakers, if the economy grows broadly in line with current predictions.
(Source: Bank of England)
(Editing by: The Decision Maker)