All eyes are on the Bank of England this morning. The UK central bank made its biggest interest rate rise in decades, as it tries to get a grip on stubbornly high inflation the rate increase to 3%
The BoE is expected to raise its key rate by three-quarters of a percent, taking Bank Rate from 2.25% to 3%, the highest since autumn 2008, at one of the most eagerly anticipated monetary policy meetings for many years.
It is the eighth rate hike in a row, driving up borrowing costs even as the country risks falling into recession.
A 75 basis-point rise is the biggest rate hike since 1989 (if you exclude the mayhem on Black Wednesday when rates were briefly hiked skyward from 10% to 12%, in vain).
Tension was mounting in the City, with just a few minutes to go until the Bank’s decision.
Where were we 6 weeks ago?
A lot can happen in a few weeks – the last time the Bank of England tweaked interest rates was six weeks ago on 22 September, when they went up by half a percentage point to 2.25%
The pound fell against the US dollar following the Bank’s announcement but just a day later former chancellor Kwasi Kwarteng’s delivered his ill fated mini-budget which caused significant economic turmoil.
Mr Kwarteng was sacked as chancellor on 14 October and replaced by Jeremy Hunt but it wasn’t long before his then boss, Liz Truss, also exited front-line politics – she left office on 20 October after just 45 days in office.
Prime Minister Rishi Sunak has promised a new plan to repair the nation’s finances later this month but tax rises and spending cuts are expected.
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