The Bank of England decided to raise its interest rates by a quarter percentage point on Thursday, just one just after the U.S. Federal Reserve hiked its rate.
In a widely anticipated event this week, the British Monetary Policy Committee voted 7-2 in favor of raising rates by 25 basis points, bringing its benchmark to 4.25% despite concerns of the recent financial crisis in the U.S. and Switzerland.
Earlier this week, the Office of National Statistics said on Wednesday that rising energy prices continued to pressure household budgets, leading to a rise in the consumer price index (CPI) to 10.4% in the 12 months through February from 10.1% in January.
Reuters polled economists predicted the annual rate of inflation would fall to 9.9% in February, down from October’s 41-year high of 11.1% but still eating into the purchasing power of workers whose wages are increasing at a slower rate.
