The Bank of England raised its key interest rate by a quarter of a percentage point to a 15-year peak of 5.25% on Thursday, its 14th back-to-back increase, and warned that borrowing costs were likely to stay high for some time.
While the U.S. Federal Reserve and the European Central Bank signalled that their rate hikes were nearing an end when they both raised borrowing costs by a quarter-point last week, the BoE’s Monetary Policy Committee (MPC) gave no such suggestion it was about to pause as it continues to battle high inflation.
“The MPC will ensure that Bank Rate is sufficiently restrictive for sufficiently long to return inflation to the 2% target,” the BoE said in fresh guidance.
Governor Andrew Bailey stressed that message, even as the BoE saw the economy growing only minimally in the coming years.
“I don’t think it is time to declare it’s all over,” he told a press conference, adding it was “far too soon” to speculate about the timing of any rate cuts. Bailey also said “we might need to raise interest rates again but that’s not certain”