Bank of England is running out of ideas to tackle inflation

‘Sledgehammer approach’

The Bank of England’s latest interest rate hike caught markets by surprise and triggered concerns the central bank could tip the economy into recession in a bid to tackle inflation.

The central bank opted to raise rates by 50bps, putting interest rates at 5% for the first time since 2008. The size of the hike was well above economists' expectations, which had forecast a 25bp increase, following a string of high inflation results. Bank of England increases rates by 50bps to 5% This was the 13th consecutive rate rise, and the Monetary Policy Committee said if there was evidence of more persistent pressures on inflation drivers, "then further tightening in monetary policy would be required". The message echoed Federal Reserve chair Jerome Powell's message at C...