Industry reaction: Bank of England rate rise only pushing problems further down the line

BoE a 'timid cat'

clock • 3 min read
The industry was expecting a more ambitious rise similar to the 0.75% increase taken by the Federal Reserve
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The industry was expecting a more ambitious rise similar to the 0.75% increase taken by the Federal Reserve

The industry has labelled the Bank of England a “timid cat” following its interest rate rise of 0.25% in its bid to tackle inflation on Thursday (16 May), with many stating it was simply prolonging the time till they take the necessary action.

The BoE raised interest rates to 1.25%, up from 1% in its continued battle to fight inflation in the UK, which it expects to peak at 11% in October. It was the bank's fifth consecutive 0.25% rise and takes the interest rate above 1% for the first time in 13 years. However, many were expecting a more ambitious rise, similar to the 0.75% increase taken by the Federal Reserve, which has taken the federal-funds rate to between 1.5% to 1.75%. The lower rise has raised concerns that sterling will face stronger competition from the dollar. Chris Beauchamp, chief market analyst at the t...

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