Bank of England set to raise rates to 3.5% after inflation hits 41-year high

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The Bank of England looks set to raise interest rates to 3.5% or more next week, but policymakers appear increasingly split on how much tightening is needed to tame double-digit inflation as the economy heads into recession.

Last month BoE Governor Andrew Bailey said further rate rises were likely to be necessary, though fewer than financial markets had priced in before that meeting, when investors were betting rates would reach 5.25% in mid-2023.the BoE's biggest rate hike in over 30 yearsFinancial markets currently price in a 78% chance that the BoE will raise rates by half a percentage point to 3.5% on Dec. 15, and a 22% chance of a rise to 3.75%.11.

While much of the increase has been driven by higher energy prices following Russia's invasion of Ukraine, the BoE fears labour shortages and other bottlenecks caused by the COVID-19 pandemic and Brexit could make inflation slow to fall. Bailey has said Britons must accept reduced living standards because of the energy price shock, but the country is in the midst of aShaw views November's 75 basis point rate rise as a one-off, coming after market turmoil caused by Prime Minister Liz Truss's short-lived government and new assumptions of more generous government support for household energy bills.

With a range of views on the MPC about how near BoE rates are to a peak, a first-ever four-way vote split was possible, she added.

 

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Does the rate raise help anywhere for reducing the inflation? Does Russia or US drop oil price for the UK because of this?

Real tough times for the UK ... the risk of Stagflation is ticking up

Won’t work. In order to reduce the amount of money they need the government to heavily tax the power/gas companies.

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The world needs to rise up against these globalist elites! Fortunately God wins in the end!

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