BOE Steps Up Inflation Fight With Surprise Rate Hike to 5%
- Bailey: More tightening may be needed if pressure persists
- Markets price in 30% chance rate to peak at 6.25% by February
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The Bank of England unexpectedly raised its benchmark interest rate by a half percentage point, stepping up its fight against the worst bout of inflation since the 1980s and warning it may have to hike again.
The nine-member Monetary Policy Committee voted 7-2 for an increase to 5%, the highest level in 15 years and the biggest move since February. Markets had priced in only a 40% chance of a half-point hike, with most economists anticipating a quarter point.