The Bank of England unexpectedly raised the interest rate

Following the results of the December meeting, the Bank of England presented an unexpected surprise to the markets, sharply raising the base interest rate from 0.1% to 0.25%. The decision was made by a majority vote. In addition, the regulator unanimously decided to leave the volume of the asset repurchase program at the level of 895 billion pounds, including the repurchase of government bonds in the amount of 875 billion pounds.

Analysts' forecasts did not suggest such actions by the central bank. The last time the British regulator changed the rate in 2018 – then it rose to 0.75%. After that, it either remained at the same level or decreased.

Representatives of the Bank of England said that such a decision was due to the acceleration of inflation to a ten-year high. In November, consumer prices increased by 5.1% compared to the same indicator in 2020. At the same time, the target level of the central bank is in the region of 2%.