Bank of England Raises Bank Rate by 15 bps to 0.25%

December 16, 2021

The Bank of England’s nine-person Monetary Policy Committee lifted the bank rate by 15 basis points to 0.25% in an 8-1 decision and indicated that modest further increases will probably be needed in 2022. Today’s move was somewhat controversial insofar as Britain is being hammered by the rapidly spreading Omicron Variant and now undergoing renewed social restrictions to fight the virus. ¬†According to today’s statement, “the labour market is tight and has continued to tighten, and there are some signs of greater persistence in domestic cost and price pressures. Although the Omicron variant is likely to weigh on near-term activity, its impact on medium-term inflationary pressures is unclear at this stage.” Today’s step reverses a 15-basis point cut done on March 19, 2020 but not the full 65 basis points of reduction that month.

Copyright 2021, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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