Bank of England is running out of ideas to tackle inflation

‘Sledgehammer approach’

Eve Maddock-Jones
clock • 4 min read

The Bank of England’s latest interest rate hike caught markets by surprise and triggered concerns the central bank could tip the economy into recession in a bid to tackle inflation.

The central bank opted to raise rates by 50bps, putting interest rates at 5% for the first time since 2008. The size of the hike was well above economists' expectations, which had forecast a 25bp increase, following a string of high inflation results. Bank of England increases rates by 50bps to 5% This was the 13th consecutive rate rise, and the Monetary Policy Committee said if there was evidence of more persistent pressures on inflation drivers, "then further tightening in monetary policy would be required". The message echoed Federal Reserve chair Jerome Powell's message at C...

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 UK

Paul Martin, UK head of retail at KPMG, said the 'limping' sales growth so close to Christmas was evidence the cost of living crisis was taking its toll on spending.
UK

Early Black Friday fizzles out with lacklustre November retail sales

Growth of 2.7% in November

Laura Miller
clock 05 December 2023 • 2 min read
The Treasury Committee has argued that benefits of the new asset promoted by the central bank did not outweigh their concerns of overall confidentiality and financial risks.
UK

Treasury Committee warns UK digital pound could put financial stability and privacy at risk

BoE urged to ‘proceed with caution’

Eve Maddock-Jones
clock 04 December 2023 • 2 min read
The Bank of England's Jonathan Haskel (pictured). Credit: World Economic Forum/Jakob Polacsek
UK

BoE's Haskel: Rate cuts will not happen 'anytime soon'

Productivity ‘in the doldrums’

Elliot Gulliver-Needham
clock 29 November 2023 • 2 min read
Trustpilot