Bank of England increases rates to pre-crisis levels — in an unexpectedly unanimous decision
The central bank says although growth has slowed ahead of Brexit, the economy is was operating at almost its ‘speed limit’
London — The Bank of England pushed interest rates above their financial crisis lows on Thursday but signalled it was in no hurry to raise them further with an uncertain Brexit on the horizon. The BoE’s nine rate-setters were unexpectedly unanimous in their vote to raise rates to 0.75% from 0.5%, the level at which they have spent most of the past decade — apart from 15 months after the Brexit vote, when they were cut even lower. Economists polled by Reuters had mostly expected a 7-2 vote in favour of raising rates. The pound almost erased its losses soon after the central bank raised its benchmark bank rate, but was driven lower in subsequent trading. It traded 0.3% lower at $1.3091 soon after the decision. UK government bond prices rose after BoE governor Mark Carney stressed the gradual path for rate hikes ahead. “Policy needs to walk — not run — to stand still,” he said as he explained a new BoE estimate of neutral interest rates for Britain’s economy, which the central bank ...
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