Bank of England Sets Highest Interest Rate in 27 Years

The Bank of England is expected to push ahead with its biggest rate hike in 27 years this week and unveil an exit strategy as part of an £895 billion ($1.1 trillion) stimulus package over the past decade.

These measures will accelerate a historic tightening of monetary policy to contain the worst inflation in 40 years. Premier Andrew Bailey and his colleagues have warned that house prices could rise 11% this year, well above the 2% target.

The Bank of England is also concerned about falling behind its peers, especially the Fed, in raising rates by 1.5 percentage points at its last two meetings. Higher interest rates for the Bank of England will also support the pound’s value, which has fallen 10% against the dollar this year.

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