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The Guardian - UK
The Guardian - UK
Business
Larry Elliott Economics editor

Interest rate hike points to the Bank keeping its foot firmly on the brake

The Bank of England governor, Andrew Bailey, and the rest of the monetary policy committee also clearly think interest rates will have to go higher.
The Bank of England governor, Andrew Bailey, and the rest of the monetary policy committee also clearly think interest rates will have to go higher. Photograph: Andy Rain/EPA

Despite believing that Britain is already in the early stages of a recession, the Bank of England voted to raise interest rates by 0.5 percentage points at the latest meeting of its monetary policy committee.

That’s the first unusual aspect of the latest pronouncement from Threadneedle Street. In the past, a slowing economy – let alone one already going backwards – would be the signal for lower borrowing costs.

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