The Bank of England made a historic error that must not be forgotten
The TelegraphMar 23, 2023
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Bank of England Raises Rates by 0.25%
Last updated Mar 23, 2023
Image credit: Zuma Press [via The Wall Street Journal]Facts
- The Bank of England (BoE) voted 7-2 Thursday to raise interest rates another 0.25%, bringing the benchmark rate to 4.25%. It also said it expects inflation to cool faster than expected despite a surprise jump in prices last month.[1]
- Previously, the central bank indicated it might pause rate increases, but BoE Gov. Andrew Bailey said despite expectations that inflation will fall, "we need to see that happening."[2]
- His comment comes as February saw an unexpected jump in inflation from 10.1% in January to 10.4% last month, fueled by food prices accelerating at the fastest pace in 45 years.[3]
- This move mirrors that of other central banks across the world, including the US Federal Reserve's (Fed) 0.25% rate hike Wednesday, the European Central Bank's 0.5% rate increase last week, and the Swiss National Bank's lifting of its rate to 1.5% Thursday.[2]
- Investors in futures markets reportedly had prepared for a 0.25% hike, with the British Sterling strengthening against the US dollar.[1]
Spin
Establishment-critical narrative
Just as Boris Johnson is answering for his mistakes and the US Fed for its role in recent bank failures, the BoE cannot be let off scot-free. The bank was slow to act when inflation began, crippling the economy, and has since poorly implemented solutions. Although these rate hikes are necessary, those in charge at the BoE should be held accountable for their failures.
Pro-establishment narrative
Though Britons may not have felt it quite yet, wholesale energy prices have fallen significantly, which means prices of goods are expected to follow suit in the near future. The BoE has brought this about through its rate hikes, the most recent of which will likely be the end of its monetary tightening as the economy shifts back toward normal. This economic crisis has been a complicated battle, but projections show the UK will soon see the light at the end of the tunnel.
