The British Central Bank is one of the first major central banks to raise interest rates last December to counter high inflation, and this increase is the largest since 1995, and the sixth in a row, bringing the main interest rate in Britain to 1.75 percent, the highest level since late 2008 at the beginning of The global financial crisis.
The core inflation rate in Britain rose to 9.4 percent, and may reach 15 percent in early 2023, according to the “Resolution” think tank, as the repercussions of Russian operations in Ukraine combine with post-pandemic pressures on the global economy.
The Bank of England, after today’s decision, joins its peers from the major central banks, which raised interest rates at high rates in order to curb soaring inflation.
And the US Federal Reserve decided last week to raise the interest rate by 75 basis points for the second time in a row, in accelerated steps by monetary policy makers to confront inflation, which reached its highest levels in more than 4 decades.
It is noteworthy that the Fed raised interest rates last June by 75 basis points, the largest increase since 1994, in addition to raising it by half by 50 basis points in May, in addition to an increase of 25 basis points in March of the same year.
On July 21, the European Central Bank raised interest rates by 50 basis points for the first time since 2011, and at the highest pace since 2000, to keep pace with the global trend towards tightening monetary policies.
Analysts’ expectations indicate that the coming period may witness more interest rate increases in America and Europe, until inflation is confirmed to decline.
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