The Bank of England (BOE) raised its interest rate by 50 basis points to 1.75%, the biggest single increase since 1995, amid concern U.K. inflation will climb significantly above 10% next year.
- The rate is now the highest since the start of the global financial crisis in late 2008.
- The U.K. central bank has raised interest rates five times since December, most recently in June with a 25 basis point increase to 1.25%.
- The crypto market seemed to take the decision in its stride, with bitcoin (BTC) holding steady in the $22,700-$23,100 range.
- The bank's Monetary Policy Committee (MPC) voted 8-1 in favor of the increase, amid forecasts inflation could reach 13% in the fourth quarter. In June, inflation was 9.4%.
- The dissenting vote was cast for a smaller 25 basis point increase to 1.5%.
- "The latest rise in gas prices has led to another significant deterioration in the outlook for activity in the United Kingdom and the rest of Europe," the MPC said. "The United Kingdom is now projected to enter recession from the fourth quarter of this year. Real household post-tax income is projected to fall sharply in 2022 and 2023, while consumption growth turns negative."
UPDATE (Aug. 4 11:29 UTC ): Removes rate from headline; adds dissenting vote, quote from statement; moves crypto market reaction higher.
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