Cost Of Living Rise In UK As Bank Of England Takes Drastic Decision

The interest rate in UK has been increased by the Bank of England, leading to expected rise in cost of living in the Western country.

Interest rate in UK was raised to 3 per cent from 2.25 per cent, the central bank of the country stated on Thursday. The new raise is the eight of such increase in consecutive months. 

Prime Business Africa reports that the rate is the highest since 1989. The increment was caused by rising energy prices and tight labour market. 

READ ALSO:State House 2023 Budget Lower Than 2022 Appropriation By Nearly 50% – Umar

The Bank of England said the UK economy has a very challenging outlook that could push it into recession for a prolonged period. 

This projection over UK is on the back of expectation that inflation will hit 11 per cent in the fourth quarter of 2022. This will be a 40-year high. 

Speaking on the bank’s decision, the Bank of England governor, Andrew Bailey, “These are big changes, they have a real impact on people’s lives.” 

Bailey explained that, “Quite simply we’re increasing bank rate because inflation is too high and it’s the bank’s job to bring it down. 

“People should not have to worry about inflation as they go about their daily business, that’s why we’ve raised inflation as we did today.” 

According to the governor, if the bank doesn’t act forcefully now, things will be worse later on, “As the forecast shows it is a tough road ahead, with a sharp increase in energy prices caused by Russia’s invasion in Ukraine has made us poorer as a nation.”