BoE Hikes Bank Rate to 0.5%, Eases Bond-Buying Program

Source: Bank of England

The Bank of England hiked its bank rate and agreed to cut down on its bond-buying program, in effort to rein in on inflation. EWU is down 0.40%, while EZU is down 2.23% premarket.

• The Monetary Policy Committee increased the bank rate by 0.25 percentage points to 0.5%, with five members voting in favor and four voting against.
• The members in the minority voted to increase the bank rate higher by 0.5 percentage points to 0.75%.
• The bank rate is in line to be increased to 1.5% by the middle of 2023, as global and UK activity returned to pre-pandemic activity at the end of 2021.
• The group also voted unanimously for England’s central bank to tone down its bond-buying program, covering both government and corporate bonds.
• The Bank of England is set to stop reinvesting maturing assets, and complete corporate bond sales no earlier than the end of 2023.
• Inflation is seen to accelerate further in the coming months to 6% in February and March, before reaching a peak of 7.25% in April.