To combat inflation, the Bank of England raises its benchmark interest rate to a new 15-year high

In an effort to lower the inflation that has been consistently high, the Bank of England increased its main interest rate on Thursday to a new 15-year high.

The central bank raised interest rates for the fourteenth consecutive time, this time by a quarter percentage point to 5.25%, as was largely predicted by economists.

There had been concerns that the bank would repeat its disproportionate half-point increase from June, especially among financially strapped people and businesses.

However, data from last month indicating that inflation decreased more than expected to 7.9% reduced the pressure to act forcefully once more.

The bank is anticipated to increase interest rates once again in the upcoming months due to inflation that is four times its 2% target.

According to economists, how quickly inflation declines will have a significant impact on the interest rate outlook.

Higher interest rates make it more expensive for households and businesses to borrow money to buy homes, automobiles, or equipment, which helps to stifle inflation but also economic growth.