(BOE) The Bank of England announced a 0.25% interest rate, an increase from the previous 0.1% and the first among global central banks since the pandemic-induced low rates.
The UK’s rate increase reflects spiraling inflation, with the central bank expecting it to reach 6% in April, three times as high as the target 2%.
BoE says despite the outbreak of the Omicron, it had to act since there were warning signs of long-lasting inflation.
BoE hinted at further rate increases but says a modest tightening of policy is likely while keeping an eye on the 2% inflation target.
Analysts now project another rate hike to 0.5% in March, and further to 1% in September.
The Monetary Policy Committee also kept the bond-buying at 875 billion pounds or $1.16 trillion
UK markets react. GBPUSD is up +0.78%, FTSE 100 is up +0.87%.
