LONDON, ENGLAND – FEBRUARY 03: Governor of the Bank of England Andrew Bailey leaves after a press conference at Bank of England on February 3, 2022 in London, England.
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LONDON — The Bank of England on Thursday raised interest rates for the third consecutive meeting as the Russia-Ukraine conflict is expected to keep inflation higher for longer.
The Bank’s Monetary Policy Committee voted in favor of a further 0.25% hike to its main Bank Rate, taking it to 0.75%.
U.K. inflation was already running at a 30-year high prior to Russia’s invasion of Ukraine, which sent energy prices surging and will exert more upward pressure on the central bank’s inflation projections.
At its last meeting in February, the Monetary Policy Committee imposed back-to-back interest rate hikes for the first time since 2004 and upped its forecast for inflation to a 7.25% peak in April, against a backdrop of strong growth and a robust labor market in the U.K.
The Bank said at the time that any further tightening of monetary policy would depend on the medium-term prospects for inflation, which were then propelled upward by Moscow’s assault on Ukraine and subsequent threats to energy supply.
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