Bank of England’s big step to curb inflation, increased interest rate for the 14th time

To reduce the ever-increasing inflation rate, the Bank of England has again increased the interest rate. With this, the interest rate in England has increased to a 15-year high. According to the information, the interest rate of Bank of England has increased by a quarter percent to 5.25 percent. The interest rate has been increased for the 14th consecutive time by the Central Bank of England.

Target to bring inflation down to 2%

According to Reuters report, BoE Governor Andrew Bailey said that the British central bank may have to increase the cost of lending. In a video clip released by the BoE, Bailey said, ‘It is our endeavor that the inflation rate comes to the fixed target of 2% and it remains at the same level.’ He also said that if the inflation rate does not come down, the interest rate may have to be increased again.

Inflation expected to come down to 4.9%

With inflation more than four times the 2 per cent target in England, economists say the interest rate outlook will largely depend on how fast inflation comes down. The Bank of England said that by the end of 2023 the inflation rate is expected to come down to 4.9%. Governor Andrew Bailey also said that the inflation rate is continuously coming down, which is a good sign.

A week ago, the interest rate was increased by the US Federal Reserve and the European Central Bank.To deal with inflation, central banks around the world, including the US central bank, are increasing the cost of lending. Inflation can be reduced by increasing the interest rate. This makes it more expensive for consumers and businesses to borrow to buy a house, car or any equipment.