The Bank of England has increased interest rates by a quarter of a percentage point, to 0.5 per cent and signalled that the first rate rise in a decade will be the start of a gradual increase in borrowing costs.
Voting seven to two in favour of the rate rise, the bank’s Monetary Policy Committee forecast that inflation would remain well above the central bank’s 2 per cent target if interest rates had stayed at 0.25 per cent. The committee indicated that two further quarter of a percentage point rate rises would be needed during the next two years to control prices.
PG View: Wow, two more quarter point hikes over the next two years. Quite the tightening campaign . . .