Bank of England raises UK interest rate to 1.25%
UK interest rates have been increased by the Bank of England from 1% to 1.25%, the highest level since 2009
The rise comes as a result of rising inflation – currently at a 40-year high of 9% – and record-level fuel and energy prices
The bank predicts rising energy prices will drive living costs even higher in October, but stated that it would “act forcefully” should inflation pressures continue to increase
The Bank of England has increased interest rates from 1% to 1.25% in an attempt to combat the rising costs of inflation.
The fifth consecutive rise has pushed interest rates to their highest level in 13 years as households face rising costs of living and higher fuel and energy prices.
The bank went on to predict that rising energy prices will drive these costs even higher in October but stated that it would act if necessary to combat inflation pressures.
In a letter to Chancellor Rishi Sunak, the Bank’s governor, Andrew Bailey, said inflation was largely due to global issues such as rising prices for energy and agricultural goods, which have worsened as a result of Russia’s war with Ukraine.
How does this affect crypto?
The exact impact on crypto is difficult to determine, but demand for Bitcoin could dwindle as rates rise as buyers are enticed away from digital assets to old-fashioned savings accounts that offer higher returns with lower levels of risk.
With Bitcoin’s correlation to the stock market at an all-time high, both crypto and stocks have fallen in recent months as a result of the bearish global macro situation.
However, as major cryptocurrencies are seeing an uptick over the start of the week and the price of Ethereum, Litecoin, Uniswap and others rising in double figures, we could be seeing a slow return to form.
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