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An interest rate hike is coming, Bank of England warns

Although the Bank of England (BoE) voted to keep its base rate at 0.5% on the 8th of February, it warned that an interest rate hike is coming as early as May and that there are more to come, as the economy accelerates with help from strong global growth.

The Bank said that it would need to raise rates to tackle stubbornly high inflation “somewhat earlier and by a somewhat greater extent” than it had anticipated towards the end of last year.

While the BoE’s rate-setting Monetary Policy Committee (MPC) voted unanimously to leave the base rate at 0.5% this month, the tone of its discussion suggests that the cost of borrowing will not remain this low for much longer.

The Governor of the BoE, Mark Carney, had previously suggested that there could be two further rate hikes to curb inflation over the next three years, but speculation will now mount over the chance of additional rate increases.

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