Bank of England interest rate decision a 'panic move' overshadowed by Covid uncertainty

0.25% rate hike a “watershed” moment

clock • 4 min read

The Bank of England’s decision to increase interest rates to 0.25% on Thursday (16 December) has been criticised as a “panic move” to prevent the UK economy drifting into “more dangerous waters” as Covid cases soar, while the threat of lockdowns and further pandemic uncertainty are set to weigh on growth forecasts going forward.

Defying expectations again, the bank said current economic conditions met the criteria to increase UK interest rates, having recently been accused by the International Monetary Fund of "inaction" over inflation, which is set to peak at around 6% in April next year. In the end, inflation concerns trumped Covid uncertainty and other pressures, leading to the Monetary Policy Committee to vote overwhelmingly in favour of an interest rate hike to 0.25%, with further rate increases on the horizon in 2022. Bank of England surprises markets by hiking rates to 0.25% Shafiq Shabir, head of e...

To continue reading this article...

Join Investment Week for free

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now

 

Already an Investment Week
member?

Login

More on Markets

Market Movers blog: American equities open higher as US claims the upper hand in Iran strikes

Market Movers blog: American equities open higher as US claims the upper hand in Iran strikes

Latest news and analysis

Investment Week
clock 26 June 2025 • 1 min read
Winterflood Business Services' Ben Centa: UK investors remain seated with seatbelts fastened

Winterflood Business Services' Ben Centa: UK investors remain seated with seatbelts fastened

Headlines have painted a picture of market chaos over the last couple of months. Panicked retail investors have apparently been crowding the exit rows.

Ben Centa
clock 25 June 2025 • 3 min read
Oil price dives as Israel-Iran 'ceasefire' rumours emerge

Oil price dives as Israel-Iran 'ceasefire' rumours emerge

Largest price falls since 2022

Patrick Brusnahan
clock 24 June 2025 • 1 min read
Trustpilot