Bank of England’s Latest Rate Decision
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This announcement marked the 14th consecutive interest rate rise, meaning the current base rate is now higher than at any time since February 2008 - around a year before the global financial crisis fully took hold.
CPI inflation in June fell to 7.9%, an encouraging sign that the economy is getting back on track following the inflationary pressures of the pandemic and war in Ukraine. However, the Bank of England will continue to keep an eye on inflation when considering their next interest rate decision on 21st September. While the fall to 7.9% is reassuring, inflation remains well above the Bank’s target rate of 2% and higher-than-expected data from May confounded many analysts who had expected inflation to fall – in the event it remained at 8.7%.
Earlier this week, some market participants believed the bank would be forced to move rates up by 0.5% in July in a bid to force down inflation but the decision the bank has to make is fraught with risk; raise rates too quickly and there is the potential that the economy could tip into a recession, raise rates too slowly and inflation will continue to eat away at purchasing power.
Is now the time to be increasing your holding in precious metals, given the uncertain crossroads in interest rate policy?
- Bank Rate increased to 5.25% - August 2023 | Bank of England (Referred on 3rd August 2023)
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