Bank of England increased interest rates, from their historic low of 0.1% to 0.25 %.
Inflation is on the rise and there are fears of stagflation. This comes amid slowing economic growth. The BoE has previously said it could hold off until more data can be collected on the Omicron Covid-19’s impact on economic performance.
With yesterday’s figure of 5.1% inflation and IMF requests for action, policymakers at the Monetary Policy Committee have made a decision to move.
Officials at America’s central bank expect three interest rate hikes next year, as they dramatically shifted their predictions in the face of soaring inflation.
Federal Reserve officials predict that inflation will rise to 2.6% in the next year, down from the September projection of 2.2%), while the unemployment rate will fall to 3.5% – close to full employment, but not quite.
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Jerome Powell, the chair of the US Fed expects that there will be three rate increases in 2022 to counter rising inflation.