BoE hikes rates to pre-pandemic level, warns of living squeeze

The Bank of England raised its key interest rate for the third successive meeting, taking borrowing costs back to their pre-pandemic level and warning the war in Ukraine may push inflation well above 8% later this year.

The increase to 0.75%, was backed by eight of the bank’s nine policy makers, with Deputy Governor Jon Cunliffe voting for no change. It marks the quickest pace of tightening since 1997, just after the BOE won the authority to set policy independently. 

The central bank said inflation now looked set to climb to around 8% in the second quarter, up from 7.25%