Bank of England Raises Key Interest Rate by 0.75 Point
Increase takes rate to highest level since November 2008
LONDON—The Bank of England raised its key interest rate by 0.75 percentage point on Thursday, the largest increase since 1989, in an effort to tame surging inflation but which, by the bank’s own estimates, will help drive the U.K. economy into a recession lasting over a year.
The central bank lifted its benchmark lending rate for the eighth consecutive meeting to 3% from 2.25%, taking it to the highest level since November 2008. Higher borrowing costs will hurt an already weak economy as consumers brace for a difficult winter of falling real incomes and rising prices.