Bank of England raises interest rates to 0.5% as inflation hits 30-year high
The Bank of England has raised interest rates for the second time in three months
The increase from 0.25% to 0.5% came as the Bank confirmed inflation was on course to hit a 30-year high
The economy is forecast to stagnate in the first three months of this year, while the Bank also cut its annual growth forecast for 2022 from 5% to 3.75%.
As the cost of living increases, the Bank of England has raised interest rates for the second time in three months, from 0.5% to 0.25% in an effort to curb the rise.
The news comes as the Chancellor of the Exchequer, Rishi Sunak, unveiled a support package to help households cope with a 54% jump in energy bills. The rise marks the first time the Bank has hiked interest rates at two successive meetings since 2004.
The Bank has also sent out mixed messages in its approach to crypto, voicing concerns over El Salvador’s acceptance of Bitcoin as legal tender only a month after beginning consultations on the possibilities of launching its own CBDC (central bank digital currency).
On how this hike may influence the cryptocurrency markets, Luno’s UK country manager Sam Kopelman said: “Price movements historically have tended to be more heavily influenced by US interest rates rather than those in the UK. However, higher interest rates generally make saving more appealing and that can have a knock-on impact on demand for all sorts of investments, particularly those in tech.”
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