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Interest Rate Rises

Interest rates rise again to counter higher prices 

Interest rates have increased for the third time in four months as the Bank of England tries to calm the rise in the cost of living.

The rise from 0.5% to 0.75% means rates are now at their highest level since March 2020, when Covid lockdowns began.

Energy bills and food costs are increasing and there is concern the war in Ukraine will push prices up further.

The Bank has warned inflation, the rate at which prices rise, may reach 8% and possibly higher, in the coming months.

Prices had already increased by 5.5% in the year to January, the fastest rate for 30 years and well above the Bank’s 2% inflation target. The Office for National Statistics (ONS) said that energy and fuel prices had contributed to the rising cost of living.

The Bank’s policymakers cited the rising cost of living and strong employment as the reasons for the latest rate rise.

It also warned that inflation could hit double–digits later in the year if energy prices push up the energy price cap.

 

Rates

 

Source: https://www.bbc.co.uk/news/business-60763740

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