Bank of England likely to hike rates again as prices surge
ABC News
The Bank of England is expected to raise interest rates for the second time in three months
LONDON -- The Bank of England is expected to raise interest rates again Thursday, putting the United Kingdom far ahead of the rest of Europe and the U.S. in moving to tame surging inflation that is squeezing consumers and businesses.
Economists and investors forecast that the bank’s monetary policy committee will boost its key rate to 0.5%, the second increase in three months. That may lead the bank to start reducing bond holdings that it has built up since the global financial crisis more than 10 years ago to stimulate economic growth.
The decision comes a week after the U.S. Federal Reserve said it would end its own asset purchases in March and was likely to raise interest rates for the first time in more than three years. Monetary policymakers around the world are trying to contain inflation fueled by rising energy prices and supply shortages as the global economy recovers from the COVID-19 pandemic.
In contrast, the European Central Bank doesn't plan to raise rates until 2023 despite record inflation, blaming it on temporary factors. But it has decided the economic recovery is strong enough for it to start carefully dialing back some of its stimulus efforts over the next year. It also meets Thursday.