The Bank of England (BoE), raised the main interest rate by 50 basis points on Thursday as expected. It now stands at 4 percent, the highest level since 2008.
It is already the tenth rate hike in the UK since the end of 2021. Its purpose is to contain soaring inflation. UK inflation is still above 10%. The BoE does not rule out further interest rate increases.
Recession is already there
The central bank also believes that the UK economy entered a five-quarter recession at the beginning of this year. The recession would be less deep than previously thought: the BoE assumes an economic contraction of 0.5 percent in 2023 and 0.25 percent in 2024, where it was 1.5 percent and 1 percent in November, respectively.
On Wednesday, the US central bank already raised the main interest rate there by 25 basis points. On Thursday, the European Central Bank (ECB) issued an interest rate decision. Analysts expect an increase of 50 basis points.