Interest rates are set to hit 1.25% today, as the Bank of England seeks to rein in inflation.
The Bank’s monetary policy committee is expected to increase rates by 0.25 percentage points from what was already a 13-year high. The Federal Reserve, America’s central bank, went further yesterday, increasing interest rates by 0.75 percentage points – the sharpest rise since 1994.
Lord King of Lothbury, a former governor of the Bank of England, said the Bank should have moved faster to raise interest rates given that inflation had reached a 40-year high of 9%.
