The Bank of England is playing catch up with inflation

The Bank of England has voted to hike interest rates to 0.75 per cent, the third successive rise, which puts rates back to their pre-pandemic levels. Historically, we’re still at ultra low levels, but the rise is anything but insignificant.

After the Federal Reserve made its first move to lift interest rates by 0.25 per cent (its first rise since 2018), it was all but guaranteed that the Bank would vote to lift interest rates again. The Fed had been holding out longer than most, with CPI in the United States hitting nearly 8 per cent, a 40-year high, before it took action. But the narrative that price hikes are ‘transitory’ finally broke down and no one – on either side of the pond – is credibly pretending this is a temporary phenomenon any longer.

The Bank’s lift to 0.75 per cent per cent straddles an attempt to rein in inflation here – at 5.5