BoE hikes main rate and begins shrinking balance sheet
UK Treasury unveils parallel measures to cushion impact of surging energy prices
The Bank of England raised its main rate today (February 3) and began shrinking its balance sheet, as the UK Treasury curbed energy price rises.
In a finely balanced decision, the monetary policy committee voted five to four in favour of a 25 basis point hike, taking the main rate to 0.5%. The four dissenters preferred a more aggressive hike of 50bp.
The BoE also triggered a process of quantitative tightening, ceasing reinvestment of matured government bond holdings, and beginning to actively
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