Pound slumps as Bank of England raises interest rates to 1% – The National

Pound slumps as Bank of England raises interest rates to 1% – The National

Britain's pound slumped against major currencies after the Bank of England raised interest rates from 0.75 per cent to 1 per cent — a 13-year high — as inflation in the UK sits at the highest level in 30 years.

The BoE announced a fourth consecutive rise of 25 basis points on Thursday, the first such run since 1997. The jump was in keeping with a global trend that has forced central banks to tackle soaring inflation.

The Monetary Policy Committee (MPC) voted 6-3 for the increase, even as the bank said Britain risks falling into recession. But economists Catherine Mann, Jonathan Haskel and Michael Saunders called for a bigger increase to 1.25 per cent to stamp out the risk of the inflation surge getting embedded in the economy.