The Bank of England hikes its key interest rate for the third time in four months on Thursday.
This pushed ahead faster than other central banks in tackling a global wave of inflation that is set to accelerate in the light of Russia’s invasion of Ukraine.
The Daily Sabah reports that the bank boosted its key rate to 0.75% after the war pushed oil prices to a 13-year high earlier this month.
This comes a day after the U.S. Federal Reserve raised its benchmark short-term rate to 0.25% to tame the worst inflation since the early 1980s.
The Bank of England, which voted 8-1 in favour of the increase, said the invasion of Ukraine has sparked large increases in prices for energy and other commodities and is likely to worsen supply chain problems that have disrupted shipments of many raw materials.
The Bank said in a statement that, “Global inflationary pressures will strengthen considerably further over coming months, while growth in economies that are net energy importers, including the United Kingdom, is likely to slow.”
Before Russia invaded Ukraine, the Bank of England expected inflation to peak at around 7.25% in April, more than three times its target of 2%.
The bank said on Thursday that it now expects inflation to accelerate to about 8% by the end of June and that it could rise further later this year.
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