The Bank of England voted for an increase Interest charges to the highest level since 2008, which was also the largest increase since 1995.
Silvana Tenreyro was the only member of the MPC to be outvoted in demanding a quarter-point rise to 1.5%.
In the minutes of the interest rate decision meeting, the bank said the majority of the MPC believed that “a more vigorous monetary policy stance was warranted”.
It said: “Against a backdrop of further increases in energy prices, there were indications that inflationary pressures were becoming more persistent and spreading to more domestically oriented sectors.”
“Overall, a faster pace of policy tightening at this meeting would help achieve that inflation sustainably return to the 2% target in the medium term and mitigate the risks of a longer and more costly tightening cycle later,” the bank added.
Sterling fell 0.05% against the US dollar to 1.211 shortly after the Bank of England’s rate hike was confirmed after being 0.7% higher before the announcement.
Additionally, the pound is down 0.5% against the euro to 1.189.
What did politicians say about interest rates?
Tory leader hopeful former Chancellor Rishi Sunak said: “One of the most pressing challenges we face as a country is to get inflation under control as quickly as possible.
“The bank acted today and it is imperative that any future government act inflationdon’t make it worse.
“Increasing borrowing will exert upward pressure Interest charges, which will mean increased payments on people’s mortgages. It will also make high inflation and high prices last longer and make everyone poorer.
“As Prime Minister, I would prioritize griffins inflationlet the economy grow and then lower taxes.”
Meanwhile, shadow chancellor Rachel Reeves was more critical. She said: “This is further evidence that the Conservatives have lost control of the economy and are soaring inflation will continue as mortgage and lending rates continue to rise.
“While families and pensioners worry about how they will pay their bills, Tory leadership candidates are touring the country announcing unworkable policies that will not help people get through this crisis.”
https://www.theargus.co.uk/news/20600698.bank-england-vote-raise-interest-rates-1-75-per-cent/?ref=rss The Bank of England votes to raise interest rates to 1.75 percent