The Bank of England are signalling that we are closer to the peak in interest rates, says Sky's Ed Conway, as he provides analysis on the interest rate hike to 4% Read more here 👉 📺 Sky 501, Virgin 602, Freeview 233 and YouTube
The Bank of England has raised UK interest rates by a further half percentage point to 4%, but gave its clearest signal yet that borrowing costs may now be nearing their peak.
This was the Bank's tenth successive interest rate increase, but in the accompanying documentation, it hinted that there is a chance it might be the last for the time being, saying that it would only raise rates further"if there were to be evidence of more persistent [inflationary] pressures" than in its forecasts.
Those forecasts suggest that inflation has now peaked, and that it will come down gradually this year and next, eventually dropping beneath the Bank's 2% target.While it still projects a technical recession this year, it would be a very shallow recession, with overall growth falling by 0.5% in 2023, compared with its November forecast of a 1.5% fall.
Seven members of the nine-person Monetary Policy Committee supported the half percentage point increase, but two members - Swati Dhingra and Silvana Tenreyro - voted to leave borrowing costs on hold. All told, while the increase today is significant, the hints included in the Bank's minutes represent a marked change in tone.
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