Bank of England Raises Interest Rate To 15-Year High

The Bank of England on Thursday lifted its key interest rate by a quarter-point to 4.5 percent, the highest level in almost 15 years, as it bids to cool sky-high inflation, according to an AFP report.

The BoE voted for a 12th hike in a row, with UK inflation remaining stubbornly above 10 percent and fuelling a cost-of-living crisis. Global policymakers are battling elevated inflation caused by runaway energy bills following the invasion of Ukraine by major oil and gas producer Russia, as per the AFP report.

The BoE warned there were "considerable uncertainties" over when inflation would return to its 2.0-percent target, citing "significant" upside risks.

"If there were to be evidence of more persistent pressures, then further tightening in monetary policy would be required," the BoE added.

But it said that it expected the UK economy to now swerve recession this year, adding there would be only a "small impact" from recent turmoil in the commercial banking sector, added the AFP report.

The rate decision comes one week after UK Prime Minister Rishi Sunak's Conservative government suffered a drubbing in local elections, as voters gave their verdict over rampant living costs despite government efforts to partly subsidise energy bills.