BoE hikes main rate and begins shrinking balance sheet

UK Treasury unveils parallel measures to cushion impact of surging energy prices

Bank of England
Photo: Juno Snowdon Photography

The Bank of England raised its main rate today (February 3) and began shrinking its balance sheet, as the UK Treasury curbed energy price rises.

In a finely balanced decision, the monetary policy committee voted five to four in favour of a 25 basis point hike, taking the main rate to 0.5%. The four dissenters preferred a more aggressive hike of 50bp.

The BoE also triggered a process of quantitative tightening, ceasing reinvestment of matured government bond holdings, and beginning to actively

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