Interest rates up

IN an effort to control inflation, a major move by the Bank Of England saw them raise interest rates by half a point to 5 per cent.

As reported on Thursday, June 22 the Bank Of England increased interest rates to combat inflation which is causing misery for households up and down the UK, according to a news source.

The Bank’s monetary policy committee (MPC) took the bold move of a halfpoint increase rather than the anticipated quarterpoint rise. This will be the 13th consecutive hike in rates since December 2021, bringing it to the highest level since 2008.

Following the announcement, UK Prime Minister Rishi Sunak said the government would “remain steadfast in its course” to slow down rising inflation, a decision which comes amid growing calls to intervene as millions of householders are struggling with mortgage payments.

The PM expanded his view: “The reason interest rates are going up is because inflation is too high. This is something that makes everybody poorer, that’s what inflation does. That’s why we’ve got to grip it, we’ve got to reduce it and interest rates are a part of that.’

Sunak reiterated the enormity of the problem: “Now, I always said this would be hard ­ and clearly it’s got harder over the past few months ­ but it’s important that we do do that.’

Yesterday’s figures showed that inflation remained at 8.7 per cent in

May, when all expectations predicted, it would fall to 8.4 per cent. This is still a long, long way away from the Bank’s target of 2 per cent.

A spokesperson on behalf of the MPC said: “There has been significant upside news in recent data that indicates more persistence in the inflation process, against the backdrop of a tight labour market and continued resilience in demand.”

The Bank of England confirmed that it would continue to monitor the situation and if deemed necessary would push interest rates higher.