Bank of England announces sharp rate hike to 1.75%

After the Bank of England's interest rate meeting last night (4th), it announced a sharp interest rate hike of 50 basis points to 1.75%, the sixth consecutive rate hike, and the largest increase since 1995. Among the nine members, only one supported a 25-basis-point rate hike, while the rest supported a 50-basis-point rate hike. The main aim is to deal with annual inflation that is currently as high as 9.4% and is expected to climb to 13.3% by October. However, the market generally believes that the current interest rate of 1.75% is not enough to suppress near double-digit inflation. In addition, the Bank of England expects the economy to enter a recession in the fourth quarter, which may last for five quarters, and GDP will contract by 2.1%. Sterling under pressure on rising risks of economic 'stagflation'.