The Bank of England is about to hike interest rates in the UK to 5.25%.

In an effort to curb persistently rising inflation, the Bank of England is expected to raise interest rates on Thursday for the fourteenth consecutive time, reaching a new 15-year high. It also plans to leave the door open for additional hikes in the months ahead.

The majority of experts predict that the U.K. central bank will raise its benchmark rate to 5.25%, or a quarter of a percentage point.

There had been concerns that the bank would carry out its disproportionate half-point rise from June, at least among hard-pressed households and companies. However, data released last month revealed that inflation unexpectedly dropped to 7.9%, which lessened the need to respond as forcefully.

According to Kallum Pickering, senior economist at Berenberg Bank, “the Bank of England has little choice but to raise the bank rate again and leave the door open to further rises at the next meetings” due to the fact that inflation is still four above the target of 2%.

Despite raising rates last week, the European Central Bank and the U.S. Federal Reserve are seen to be closer to pausing since inflation has decreased more than it did in the United Kingdom. The rate of price increases has decreased to 3% in the US and 5.3% in the 20 nations that use the euro.

In order to fight the inflation that resulted from rising energy prices following Russia’s invasion of Ukraine and supply chain disruptions during the global economy’s recovery from the coronavirus pandemic, central banks worldwide have started increasing borrowing costs. By making it more expensive for people and businesses to borrow money to purchase homes, automobiles, or equipment, higher interest rates not only slow down inflation but also hinder economic growth.

There’s a number of reasons why inflation in the UK is greater. Brexit, the United Kingdom’s exit from the European Union, is largely to blame for the trade barriers and increased expenses faced by companies.

Others place more of the blame on the Bank of England for commencing interest rate increases too slowly, which allowed inflation to spread across the economy and result in higher wages.

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