He bank of england raised interest rates this Thursday from 5 to 5.25%, the highest level in 15 years, in order to control year-on-year inflation, which stands at 7.9%.
This is the fourteenth consecutive rise in the price of money, decided at the end of the meeting of the Monetary Policy Committee of the English entity -made up of nine members-, whose objective is to control inflation so that it remains at 2%.
He Consumer price index (CPI) for the UK stood at 7.9% in the twelve months to June, up from 8.7% year-on-year in May, according to the latest official data.
Six committee members voted in favor of the rate increasewhile three did so against.
In justifying the measure, the entity stressed that inflation is falling but is still at very high levels and added that it decided to increase rates to ensure that the inflation follow its downward trend.
In addition, he warned that he hopes that the YoY inflation decline considerably this year and that it can reach its 2% target by early 2025.
“Inflation of food priceswhich has a particularly important impact on the cost of living for low-income families, since it constitutes a greater part of the budgets of these families, is still extremely high,” the bank said.
The Minister of Economy, jeremy huntsaid today that, “if we stick to the plan (to lower inflation), the bank forecasts that inflation will be below 3% within a year without the economy going into recession.”
“But that doesn’t mean it’s easy for families to deal with mortgage bills higher, so we will continue to do what we can to help households,” he added.
The Conservative Government of Rishi Sunak It has set itself the goal of lowering inflation this year, after it rose considerably due to the rise in energy prices caused by the war in Ukraine.
In addition to inflation, the United Kingdom has an accumulated net debt of 2.59 trillion pounds (€3.01 trillion), 100.8% of the country’s gross domestic product (GDP), which remains at levels not seen since the beginning of the past 1960s, according to figures recently released by the National Statistics Office.
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