New interest rate increase signal in the UK

Huw Pill, chief economist of the Bank of England (BOE), said in an interview with CNBC that "Steps should be taken against inflationary pressure in the UK. The labor market is tighter than forecast in November. Thursday's BOE rate hike was in response to key inflation dynamics linked to labor markets," adding that he expects inflation to be more persistent depending on the labor market.

On the other hand, Goldman Sachs economists led by Steffan Ball expect three rate hikes from the BOE in 2022. Economists who published a report on the subject stated that the BOE "wants to tighten" while predicting that the policy rate will be increased to 1 percent next year.

A surprise rate hike from the Bank of England

The Bank of England raised its policy rate from a record low of 0.1 percent to 0.25 percent in response to rising inflationary pressures, while maintaining its asset purchase program at 895 billion pounds. The interest decision was taken by 8 votes to 1.

Economists surveyed by Bloomberg did not expect a change in interest rates.

In the statement, it was stated that inflation will peak at around 6 percent in April and that there may be some "moderate tightening" in monetary policy.