Bank hikes interest rates in bid to curb inflation spike

The move by the bank, which mirrors rate hikes by the United States Federal Reserve and a range of other national central banks, follows a spike in energy and food prices prompted by the Russian invasion of Ukraine and subsequent sanctions on Moscow. The rate rise in London will increase the average monthly mortgage payment by £25 per month.  [Shutterstock/William Barton]

The Bank of England on Thursday increased interest rates to 1.25% in a bid to head off spiralling inflation, which has hit 9% and is likely to rise further in the coming months.

Read also: Europe’s central banks jack up interest rates to fight inflation surge

The move by the bank, which mirrors rate hikes by the United States Federal Reserve and a range of other national central banks, follows a spike in energy and food prices prompted by the Russian invasion of Ukraine and subsequent sanctions on Moscow. The rate rise in London will increase the average monthly mortgage payment by £25 per month. 

The European Central Bank has also stated that it will increase its headline rate in July and again in September as central banks seek to curb inflation.  

However, the UK economy is at severe risk of entering a recession following several months of negative growth. 

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