Bank of England raises interest rates

The Bank of England raised its main interest rate to 0.25 percent on Thursday, marking the first time the rate has increased since before the COVID-19 pandemic began.

The central bank’s Monetary Policy Committee voted 8-1 for the increase on Wednesday, the bank announced. 

Despite concerns of an uptick in COVID-19 infections following the detection of the new omicron variant, most economists polled by Reuters expected the Bank of England to maintain a 0.1 percent bank rate, which was a historic low.

The decision comes amid inflation-related concerns after the United Kingdom saw a record-breaking jump in inflation rates in September.

Reports at the time said it was “likely to be a temporary change” because of the pandemic. But in November, inflation in the U.K. hit a new 10-year high when the Consumer Price Index went up by an annual 5.1 percent, according to CNBC. 

The Bank of England said Thursday that it now expects inflation to remain around 5 percent through most of the winter, and projected that the rate will peak around 6 percent in April 2022.