The British central bank (BoE) has raised interest rates for the first time since the start of the corona pandemic. The main interest rate goes from 0.1 to 0.25 percent. The decision was unexpected: a majority of analysts expected everything to stay the same.
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The interest rate hike should help curb high inflation. It currently stands at 5.1 percent – the highest level in more than a decade – and could rise to 6 percent in the coming months. On the other hand, the omikron variant of the coronavirus must also be taken into account, which can weigh on the economy.
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The key UK interest rate has stood at 0.1 percent since March 2020, when the BoE stepped in to prop up the economy in the early days of the coronavirus pandemic. It is now the first increase since August 2018.
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