TheCable

The Bank of England (BoE) has raised its interest rates from 4 percent to 4.25 percent in order to combat inflation.

The rate is the highest recorded since October 2008.

This is the 11th time in a row, in less than 18 months, that the central bank of the United Kingdom has hiked interest rates.

On Thursday, the bank’s monetary policy committee (MPC) voted by a majority of seven to two to increase the base rate of interest by 0.25 percentage points.

“The MPC will continue to monitor closely indications of persistent inflationary pressures, including the tightness of labour market conditions and the behaviour of wage growth and services inflation,” the BoE said in a statement.

“If there were to be evidence of more persistent pressures, then further tightening of monetary policy would be required.”

The bank’s MPC said it expected the surge in inflation to cool sharply in the coming months.

“The committee has voted to increase Bank Rate by 0.25 percentage points, to 4.25%, at this meeting. CPI inflation increased unexpectedly in the latest release, but it remains likely to fall sharply over the rest of the year,’ the BoE said.

“Services inflation has been broadly in line with expectations. The labour market has remained tight, and the near-term paths of GDP and employment are likely to be somewhat stronger than expected previously. Although nominal wage growth has been weaker than expected, cost and price pressures have remained elevated.

“The extent to which domestic inflationary pressures ease will depend on the evolution of the economy, including the impact of the significant increases in Bank Rate so far. Uncertainties around the financial and economic outlook have risen.”

The BoE follows other central banks in increasing interest rates amid persistent global inflation.

On Tuesday, the Central Bank of Nigeria (CBN) raised its benchmark interest rate by 50 basis points to 18 percent.