The Bank of England has hinted at further interest rate increases as it strives to return inflation to 2%.<\/p>\n\n\n\n
In a speech on Wednesday, the central bank’s chief economist Huw Pill stated that the central bank’s priority was to reduce prices and make life more affordable.<\/p>\n\n\n\n
In the United Kingdom, inflation reached 9.1 percent in May, the highest level in 40 years. In addition, interest rates have reached a 13-year high of 1.25 percent.<\/p>\n\n\n\n
Mr Pill stated that he was willing to vote for an interest rate increase above 0.25 percent.<\/p>\n\n\n\n
This is the same figure that the Bank of England chose for the last five consecutive interest rate increases.<\/p>\n\n\n\n
Mr Pill stated in his statement that he was willing to tighten at a faster pace, but that it was contingent on the economic data.<\/p>\n\n\n\n
“Much remains to be resolved before we vote on our August policy decision,” he said.<\/p>\n\n\n\n
Sir Jon Cunliffe, the bank’s deputy governor, told that the bank would act “forcefully” to prevent higher inflation from becoming “the new normal.”<\/p>\n\n\n\n
The rate of inflation in the United Kingdom is rising as fuel, energy, and food prices rise, owing in part to the conflict in Ukraine and sanctions imposed on Russia.<\/p>\n\n\n\n
The Bank of England warned in June that inflation could reach 11%.<\/p>\n\n\n\n
Raising interest rates is one method of attempting to control rising prices or inflation. This raises the cost of borrowing, making people want to borrow less and spend less. <\/p>\n\n\n\n
“We recognise the hardship associated with elevated inflation rates,” he said, noting that lower income families were being forced to spend more on energy and food due to higher prices.<\/p>\n\n\n\n
“Recent price rises have imposed a significant squeeze on their real incomes,” he said.<\/p>\n\n\n\n
The central bank raised interest rates from 1% to 1.25 % in June, the fifth consecutive increase.<\/p>\n\n\n\n
Mr Pill suggested that more rate hikes were on the way, saying, “Acting to achieve the 2% inflation target is now more important than ever, and the MPC has both the tools we need and the resolve it will take.”<\/p>\n\n","protected":false},"excerpt":{"rendered":"
The Bank of England has hinted at further interest rate increases as it strives to return inflation to 2%. In a speech on Wednesday, the central bank’s chief economist Huw … <\/p>\n