UK Inflation Soars to 41 Years High, As Brits Grapple With Rising Energy and Food Costs

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Earlier in November, the Bank of England hiked interest rates by 75 basis points for the first time in over three decades to try to cool red-hot inflation rates. The UK central bank has now raised rates eight times since February to hit 3%, the highest level since the 2008 financial crisis.

“Inflation is over five times the BoE’s 2% target and adds pressure on the UK central bank to raise interest rates again in the December meeting,” said Fiona Cincotta, senior financial markets analyst at City Index.

 

“The market expects the BoE to raise rates by 50 basis points taking the benchmark rate to 3.5%,” she added.

Jeremy Hunt, the UK’s finance minister, has announced he will make spending cuts in a new government budget expected to be announced Thursday. That could help the BoE in its mission, the Chancellor of the Exchequer suggested.

“This insidious tax is eating into pay cheques, household budgets and savings, while thwarting any chance of long-term economic growth,” Hunt said, referring to the coronavirus pandemic and the fallout from Russia’s war in Ukraine