Skip to content 
Search

Latest Stories

Bank of England expects inflation to cool faster, hikes interest rates again

Finance minister Jeremy Hunt said he supported Thursday’s rate hike as part of Britain’s battle against high inflation

Bank of England expects inflation to cool faster, hikes interest rates again

The Bank of England raised interest rates by 0.25 per cent on Thursday (23) and expressed optimism that the recent surge in British inflation would cool down faster than anticipated, despite a surprise increase in price growth last month.

The Bank's decision was in line with expectations from a Reuters survey of economists, with seven of its nine rate-setters voting for the increase.


This marked the eleventh consecutive time the Bank raised borrowing costs, but the smallest increase since June.

While two members of the Monetary Policy Committee voted to keep rates on hold, Catherine Mann supported the modest 25 basis-point increase, despite being known for advocating for larger increases. The Bank's outlook for the country's sluggish economy was more positive overall.

The BoE - which is trying to reconcile a weak economic outlook and anxieties about global banks with stubbornly high inflation - kept unchanged its message that the MPC saw less urgency about maintaining its fast run of rate hikes.

"The MPC will continue to monitor closely indications of persistent inflationary pressures, including the tightness of labour market conditions and the behaviour of wage growth and services inflation," the BoE said.

"If there were to be evidence of more persistent pressures, then further tightening of monetary policy would be required."

BoE Governor Andrew Bailey and his colleagues last month said that they were ready to act forcefully if the outlook suggested persistent inflationary pressures.

Sterling firmed against the US dollar and the euro while British government bond prices were little changed after the announcement. Investors in rate futures markets positioned themselves for one more 25 basis-point move by the BoE, putting a roughly 50 per cent chance on a quarter-point increase as soon as May.

Finance minister Jeremy Hunt said he supported Thursday's rate hike as part of Britain's battle against high inflation.

Karen Ward, chief market strategist EMEA at J.P. Morgan Asset Management, said the prospect of persistent inflation was a bigger worry in Britain than elsewhere, adding that the BoE should refrain from offering guidance about future policy.

"Over the past year they have frequently signalled a view that they expect interest rates to peak at current levels but then the inflation data has proved otherwise," Ward said.

(Reuters)

More For You

JLR Tata

A logo is pictured outside a Jaguar Land Rover new car show room in Tonbridge, south east England.

JLR Q1 sales dip as US tariffs hit exports

Jaguar Land Rover (JLR) reported a 10.7 per cent drop in sales for the April–June quarter, as a temporary pause in shipments to the United States and the phase-out of Jaguar’s legacy models weighed on volumes.

The company, owned by India’s Tata Motors, sold 87,286 units to dealers worldwide during the quarter, compared to 97,755 units in the same period last year.

Keep ReadingShow less
Bangladesh seeks US deal to shield garment industry from tariffs

Workers are engaged at their sewing stations in a garment factory in Savar, on the outskirts of Dhaka, on April 9, 2025. (Photo by MUNIR UZ ZAMAN/AFP via Getty Images)

Bangladesh seeks US deal to shield garment industry from tariffs

BANGLADESH, the world's second-biggest garment manufacturer, aims to strike a trade deal with the US before Donald Trump's punishing tariffs kick in next week, said the country's top commerce official.

Dhaka is proposing to buy Boeing planes and boost imports of US wheat, cotton and oil in a bid to reduce the trade deficit, which Trump used as the reason for imposing painful levies in his "Liberation Day" announcement.

Keep ReadingShow less
UK business district
The Canary Wharf business district including global financial institutions in London.
Getty Images

Bond yields ease following Starmer’s support for Reeves

THE COST of UK government borrowing fell on Thursday, partially reversing the rise seen after Chancellor Rachel Reeves became emotional during Prime Minister’s Questions.

The yield on 10-year government bonds dropped to 4.55 per cent, down from 4.61 per cent the previous day. The pound also recovered slightly to $1.3668 (around £1.00), though it did not regain all its earlier losses.

Keep ReadingShow less
modi-trump-getty
Modi shakes hands with Trump before a meeting at Hyderabad House in New Delhi on February 25, 2020. (Photo: Getty Images)
Getty Images

Indian exporters watch closely as Trump says trade deal with India likely

THE US could reach a trade deal with India that would help American companies compete more easily in the Indian market and reduce tariff rates, President Donald Trump said on Tuesday. However, he cast doubt on a similar deal with Japan.

Speaking to reporters on Air Force One, Trump said he believed India was ready to lower trade barriers, potentially paving the way for an agreement that would avoid the 26 per cent tariff rate he had announced on April 2 and paused until July 9.

Keep ReadingShow less
Kolhapuri sandal sales surge in India post Prada controversy

Customers shop for 'Kolhapuri' sandals, an Indian ethnic footwear, at a store in New Delhi, India, June 27, 2025. REUTERS/Adnan Abidi

Kolhapuri sandal sales surge in India post Prada controversy

INDIAN footwear sellers and artisans are tapping into nationalist pride stoked by the Prada 'sandal scandal' in a bid to boost sales of ethnic slippers with history dating back to the 12th century, raising hopes of reviving a struggling craft.

Sales are surging over the past week for the 'Kolhapuri' sandals that have garnered global attention after Prada sparked a controversy by showcasing similar designs in Milan, without initially crediting the footwear's origins.

Keep ReadingShow less