[Asia Economy Reporter Naju-seok] The Bank of England (BOE), the central bank of the United Kingdom, raised the base interest rate by 0.5 percentage points on the 2nd (local time). The base interest rate thus reached 4%.
The UK base interest rate has risen to its highest level since 2008. This move follows a slight decrease in the UK's inflation rate from 10.7% to 10.5% in December last year. Since December 2021, the UK has continuously raised the base interest rate by 0.25 to 0.5 percentage points. With this increase, the base interest rate has risen for the 10th consecutive time.
Foreign media explained that this rate hike is in line with market and economic experts' expectations.
The UK Monetary Policy Committee decided to raise the base interest rate by a vote of 7 to 2. It is known that two members expressed the view that the existing rate should be maintained.
However, this rate hike differs in that while the US Federal Reserve (Fed) raised its base interest rate by 0.25 percentage points, the UK maintained a 0.5 percentage point increase trend.
The Monetary Policy Committee made it clear that future interest rate policies depend on economic conditions. Unlike before, the committee's statement this time omitted the expression that it could act "firmly" regarding future rate hikes. Instead, it included language indicating that if there are signs that inflation will remain high and prolonged, additional rate hikes may be implemented.
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