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: Bank of England lifts key rate to 1%, a 13-year high, as it forecasts economy to contract

The Bank of England on Thursday lifted its key interest rate, its fourth increase of the current cycle.

By a 6 to 3 vote, the Bank of England opted to lift rates by a quarter point to 1%, as it seeks to curb inflation. The minority voted to lift rates by a half point.

The U.K. has seen runaway natural gas prices — the lead UK natural-gas contract has jumped 168% over the last year — as well as rising wages. The U.K. economy however endured a rougher hit from the coronavirus pandemic than either the U.S. or the eurozone.

The Bank of England said it expects inflation to reach 10% this year

The Federal Reserve on Wednesday opted to lift rates by a half point, and Australia’s and Brazil’s central bank also have increased rates this week. Norway’s central bank paused but said it’s likely to increase rates again in June.

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