Bank of England Makes Biggest Rate Rise Since 1995 as Inflation Soars
U.K. central bank warns nation will enter recession later this year
LONDON—The Bank of England raised interest rates by the most in a quarter-century Thursday even as it predicted the U.K. economy will fall into recession later this year, underscoring global central banks’ urgency in fighting a surge in inflation.
The rate increase to 1.75% from 1.25% was the largest since 1995 and the first half-point increase since the bank was granted independence in 1997. The move mirrors recent rate hikes by the Federal Reserve and the European Central Bank, reflecting fears that the longer inflation is allowed to persist, the harder it will be to bring down.