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Bank of England hikes rates to 0.5%, up 25 basis points

The Bank of England in London

kelvinjay/E+ via Getty Images

The Bank of England raised its benchmark interest rate to 0.5% from 0.25%.

The quarter-point hike was largely expected by the markets. But the vote was split.

Four of the nine Monetary Policy Committee members

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Comments (25)

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we need to vote all of them out, rates should be negative.

Rates will be negative eventually. The fact that supply disruptions are the reason for inflation should concern you about the long-term health of inflation. It's going to crater in the coming decade and soon go to negative.
More reason why we don't need government involvement in the free market. Get rid of the Fed and reduce government spending and influence on the free market. Return to the gold standard.
That will really help clear the supply bottlenecks and energy (Russia), raising rates.


UK energy bills are skyrocketing due to Russia. They are trying to limit to 50% hike by April.

bill h illify profile picture
Power companies look to be able to increase rates by 50%, I believe shortly, after raising rates by 12% last October…British people getting ready to pay some real increases!
Chris Lau profile picture
BOE looks strong compared to ECB.
@Chris Lau boe focused on one country. Ecb has to focus on every country. There are plenty of strong countries in Europe that can survive a .25% hike but more that literally can’t
@Chris Lau In America/FED, you got regions that can easily pay higher bills and are very rich (especially east+west coast and arround the big lakes up north).
And you got very poor almost bankrupt regions hard smack down the middle. Think roughly line [Arkansaw, Alabama, Missiouri, Kentucky, Mississipi, New Mexico...] and the like.
You're easily taking incomes up to 2-3x higher in the coastal states and northern states than middle/inland U.S..

So if you put in a rate hike? Rich locations wont care much. Others will forcibly move into their minivan cause the bills can no longer be paid.
So its a delicate balancing act between evils. Hike interests and the poor suffer with even higher bills (mortage etc), or keep interest equal and watch the poor suffer trough inflation going higher.

The same goes for Europe/ECB. You got the north that is very rich and propering, and where rate hikes are needed and are easily handled. Then south thats near bankrupt where an interest hike needs to be paid somehow, except there aint no money.
Lived in the UK for 15 years and loved every minute of it. Such a wonderful place and people. I wish you all the best of luck should the BOE continue to make good on its desire to tame inflation. In doing so, many inconvenient truths will finally bare out. Here, in the US, we should begin experiencing the same inconvenient truths in about one or two months. Opinion flash: not only can we not afford the size of our respective governments...but they have also become too big to succeed.

The above is an opinion statement.

Long proven dividend payers and short-term paper.
"We expect inflation to rise to around 7% in the spring," ... I would not have dreamed to see such inflation again.
We expect inflation to rise to around 7% in the spring

and in the US the feds are predicting inflation to fall to 2%.
@Finding Your Retirement


The likes of US is essentially energy independent or under NAFTA.

BoE will eventually need to raise rates though.

However, going overboard over supply issues would be stupid and counterproductive.
@Entreri the US was energy independent. we currently import oil from venzuela, middle east, and russia
@Finding Your Retirement

Oil (overall US a small net exporter), imports:

SA 7, Russia 7%. Venezuela too small % to make the list.

Canada 52%.

US produces 18m, imports 8m. So excluding Canada, the % become negligible and can be replaced. Europe doesn’t have this luxury.


Natural gas, 98% US imports from Canada. No Putin.
A quarter percent? WOW.. that will kill roaring inflation, for sure.
@Jim_Berger Better than what the U.S. is doing which is nothing but mouthing off.
"The UK government intends to smooth energy prices lower (subsidize now, charge next year)."

Am I the only one confused by this?
@katieliu76 they expect energy prices to drop next year but instead of lowering prices they will jack the price to cover the cost of subsidies this year. Imagine going to the gas station and paying 4 dollars for 2 straight years even though oil just crashed to 50 bucks
@Finding Your Retirement well if the policy is clear you could understand it. You are paying 4 $ instead of 6$. When the subsidy is paid off you go back to normal. Why would that be so tough?

The issue is that in the uk the prices reset periodically. So now it will jump a lot, but it could smooth out later.
Stefan Redlich profile picture
at least some smart people in there: "
Four of the nine Monetary Policy Committee members dissented"

even tough hikes should be at least 1% to tame hot inflation even if it crashes the markets, shouldn't matter
@Stefan Redlich its not just inflation. Govt needs debt. We all know they'd go bankrupt if rates were 10%...
@Stefan Redlich thats blasphemy, markets are above anything!! F. families, f. inflation, asset prices MUST go up to sustain their ponzi scheme..
Inflation predicted to peak at 7.25% in April
There is an energy crisis in Europe. Not because they're a bunch of greenies but rather purely because Russia is so powerful
stephenmcmahon83 profile picture
@LongTermActivist For the last 4 years, the USA (with some EU support) has been doing everything in it's power to stop the construction of the Russian NS2 pipeline into Germany, which would drastically increase German energy supply.

How does that fact mesh with your idea that the EU energy crisis is caused by a "powerful Russia"?
@stephenmcmahon83 Russia is weaponising it's gas supply
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