Bank of England raises interest rate to 5%

LONDON - The Bank of England has raised its benchmark interest rate by 0.5 percentage points to 5 percent, the central bank said in a statement on Thursday.

At its meeting ending on Wednesday, the BoE's Monetary Policy Committee voted by a majority of seven to two in favor of the decision, the statement added.

It came as the 13th consecutive rate hike since December 2021 as the central bank has battled against stubbornly high inflation, bringing the interest rate to the highest since 2008.

The United Kingdom's consumer price index (CPI) rose by 8.7 percent in the 12 months to May, unchanged from April. This is 0.3 percentage points higher than expected in the BoE's May report.

There has been significant upside news in recent data that indicates more persistence in the inflation process, against the background of a tight labor market and continued resilience in demand, the BoE said.

The BoE said it will continue to monitor closely indications of persistent inflationary pressures in the economy as a whole, including the tightness of labor market conditions and the behavior of wage growth and services price inflation.

"If there were to be evidence of more persistent pressures, then further tightening in monetary policy would be required," it said.