The move brings the main cost of borrowing for commercial banks in the United Kingdom to 5.25% — its highest level since February 2008 — and is the 14th consecutive hike since the central bank starting raising rates in December 2021. It was a split decision by the bank. Six members of the monetary policy committee voted for the quarter point hike, two for a half point hike, and one for a pause. “Recent data outturns have been mixed,” the Bank of England said in a statement.
There could be more pain for borrowers to come. Before Thursday’s hike, financial markets were predicting the Bank of England’s benchmark interest rate to peak at 5.75% by the end of the year as the central bank tries to rein in rising prices. Kallum Pickering, senior economist at Berenberg, wrote in a note Tuesday that “probably less than half” of previous rate hikes “has passed through into the real economy so far.