Inflation in the UK could even climb to eight per cent in April. The Bank of England therefore raised its base interest rate on Thursday to the pre-pandemic level.
In total, eight of the nine members of the Bank of England voted to raise the base interest rate by a quarter of a percentage point to 0.75 percent. One central banker, Bank of England Deputy Governor Jon Cunliffe, preferred to keep the rate at 0.5 percent.
The Bank of England raised interest rates for the third time in a row, the last time this happened was in 1997. The UK is facing unusually high inflation, like the vast majority of developed economies. There is a real risk that inflation rate will reach around 8 % in April. A month ago, the Bank of England was forecasting inflation of 7 %.
The British raised their key interest rate just a day after the US Fed also decided to raise interest rates. Inflation is also becoming an increasing problem in the US, where it is at the highest point in 40 years and still rising.