By Paul Hannon
The Bank of England said it would increase interest rates by 0.5 percentage points to 3.5%, following the Federal Reserve in slowing the pace of increases as inflation edges lower.
The BOE's decision follows a similar move by the Swiss National Bank on a busy day for Europe's most influential central banks. Investors expect the European Central Bank to announce a 0.5-point rate increase later Thursday. Both the BOE and the ECB have been battling all year with inflation that has spiraled to multidecade highs, partly fueled by a surge in energy prices following Russia's invasion of Ukraine.
Major central banks are shifting down a gear after conducting the fastest cycle of interest-rate increases in decades as they try to gauge the level at which policy rates should ultimately land.
Officials are trying to balance the risk of causing unnecessary pain for households and businesses by raising rates too high, too fast, with concerns that robust wage rises could make inflation more entrenched.
The rise to 3.5% takes the key rate to its highest level since October 2008, when the central bank was rushing to loosen policy to support economic growth as the global financial crisis struck.
Write to Paul Hannon at paul.hannon@wsj.com
(END) Dow Jones Newswires
12-15-22 0721ET
