London, (Parliament Politics Magazine) – The Bank of England recently raised interest rates in the UK to 0.25%. The move came just one day after inflation figures showed that the cost of living had risen by 5.1% in the year to November. The bank now expects inflation to remain around 5% for most of the winter and reach a peak of 6% in April 2022. The bank says that the recent rise in inflation is “distracting” and that it expects the trend to continue through 2022.
The Bank of England is currently holding the base rate at 0.1 percent, which is historically low for the UK economy. The low rate encourages people to borrow money and make purchases. But, as interest rates rise, borrowing costs will rise, including those for mortgages. Although the Bank of England is unlikely to raise rates, it has signaled that they will do so before the end of next year. However, it has been suggested that interest rates will be higher in 2022 than they were at the beginning of the decade.
As a result of recent soaring prices, the Bank of England is attempting to curb inflation. As a consequence, the country’s monetary policy committee raised interest rates from a record low of 0.1% to 0.25%, a move that is likely to be accompanied by a sharp rise in the UK’s interest rates. This is the first major central bank action since the pandemic began.
As the UK’s economy continues to recover from the Covid-19 pandemic, the Bank of England has lowered its base rate. The Bank of England now expects that the economy will recover from this disruption in the first quarter of 2022. As a result, the bank now expects the economy to grow at a faster pace in the second half of the year. Despite these setbacks, the UK’s economy will still see an increase in housing costs by the end of the year.
The UK economy has already experienced massive inflation. The Bank of England is countering this by increasing the base rate to combat the problem. But despite the rise in inflation, the government still hasn’t been able to keep the pace. While the economy has improved, so has the price of basic goods. But, despite the rise in base rates, the UK economy is still suffering. The country’s supply chain is also suffering.
The Bank of England recently said that the first rise in interest rates will be in December or February, with the first rise in 2022 likely to be in January. The Bank of England governor, Andrew Bailey, has warned that if rates are not raised by then, they will need to increase the rate again. The government’s forecast is that it will have to raise the rates three more times in 2022, but the current situation is far from stable.
