Bank of England tries to rein in soaring inflation

The regulator has hiked interest rates to highest in 14 years

The Bank of England (BoE) on Thursday raised the benchmark interest rate for a ninth time in a row this year, in an effort to combat double-digit inflation in the country.

The Monetary Policy Committee (MPC) voted to increase the cost of borrowing by 50 basis points to 3.5% after the consumer price index showed annual inflation of 10.7% last month.

The hike takes UK rates to their highest level since October 2008 and comes despite expectations that the nation is falling into a lengthy recession. It marked a slowdown, however, in the pace of rate rises, from November’s 75-basis-point increase.

“The labor market remains tight and there has been evidence of inflationary pressures in domestic prices and wages that could indicate greater persistence and thus justifies a further forceful monetary policy response,” the MPC stated, signaling that more tightening may be needed.

Consumer price inflation in the UK accelerated to a 41-year high of 11.1% in October, fueled by skyrocketing costs of food and energy.

READ MORE: Dismal outlook issued for British economy

The BoE said last month the economy was probably already in a recession that could last until the end of 2023. It now expects the country’s gross domestic product to decline by 0.1% in the fourth quarter of 2022.

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