The Bank of England has taken decisive action to combat the economic downturn caused by the coronavirus pandemic by hiking interest rates by 50 basis points. This move is expected to help the country avoid a deeper recession than previously feared.
The bank’s governor, Andrew Bailey, said the move was necessary to ensure a “much shallower” recession than feared. He also said that the decision had been made with the intention of providing support to the economy and encouraging lending.
The decision was made after a meeting of the Monetary Policy Committee, who discussed the latest economic data. The data showed that the UK economy is starting to turn around, but the pace of recovery is still uncertain.
The Bank of England’s decision has been welcomed by economists, who say it will help to stimulate the economy and encourage businesses to invest.
However, some experts have warned that the rate hike could have a negative impact on households, as it may lead to higher borrowing costs.
David Hargreaves, an economist at Interest.co.nz, said that policymakers should consider one last rate hike before the economic tide turns. He said this would help to ensure that the UK economy is in a strong position when the recovery begins.
Overall, the Bank of England’s decision to hike interest rates by 50 basis points is a sign of confidence in the UK’s economic future. It is hoped that this move will help to stimulate the economy and provide much-needed support to businesses and households.