Higher inflation forces BoE to pursue rate rise in face of banking crisis

Followed Fed with 25bps hike

The UK’s higher than expected inflation results forced the Bank of England to prioritise bringing it down, rather than focusing on the fractures of the banking sector.

UK inflation hit 10.4% in February, an unexpected increase that followed three months of consecutive declines. The Office for National Statistics said the increases were largely attributed to rises in housing and household services - in particular fuel, gas and electricity prices - as well as food and non-alcoholic beverages. The result "refocused the BoE's attention on inflation", said William Marshall, CIO at Hymans Robertson Investment Services. Marshall said the fragility seen in the banking sector over recent weeks had created some uncertainty for the Bank of England going int...