Bank of England to Hike Interest Rates again amid Rising Inflation

The Bank of England (BoE) is likely to institute another interest rate hike again as inflation soars to higher levels, thereby posing a considerable threat to Britain’s economy, reported Reuters.

In a poll conducted by Reuters, 44 out of 49 economists believe that the BoE will increase borrowing rates by 0.75% while the others expect it to hold on to its current 0.5% interest rate hike level. The British central bank in February projected an April inflation rate of 7.25% which is four times that of the bank’s 2% target. However, the prediction has since been altered after Russia invaded Ukraine last month.

This comes after the U.S. Federal Reserve adopted its most aggressive stance in decades by raising interest rates by a quarter-point on Wednesday while hinting at six additional rate hikes that will come into effect this year.

According to ING’s Chris Turner and James Smith, the Ukraine-Russia crisis will cause inflation to persist in the United Kingdom. They added that “this means the BoE will double-down on its tightening plans."