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The Bank of Eng­land has increased interest rates.

BoE
 The Bank of Eng­land has increased interest rates by a quarter of a per­cent­age point to 4.25 per cent, des­pite the tur­moil that has engulfed bank­ing in recent weeks.

The rise, in line with eco­nom­ists’ fore­casts, came a day after data showed that the annual rate of infla­tion jumped from 10.1 per cent to 10.4 per cent in Feb­ru­ary. «If there were to be evid­ence of more per­sist­ent pres­sures, then fur­ther tight­en­ing in mon­et­ary policy would be required,» it said, echo­ing guid­ance it gave at its Feb­ru­ary meet­ing.

Com­ment­ing days after the forced takeover of Credit Suisse and the earlier col­lapse of Sil­icon Val­ley Bank, the BoE said it judged UK banks to be «resi­li­ent» and «well placed to con­tinue sup­port­ing the eco­nomy in a wide range of eco­nomic scen­arios, includ­ing in a period of higher interest rates».

But the BoE said that con­sumer price infla­tion was «still expec­ted to fall sig­ni­fic­antly» in the second quarter of this year «to a lower rate than anti­cip­ated» last month. It said this was mainly because of declines in energy prices and the gov­ern­ment’s decision to main­tain a sup­port scheme for house­holds.

The bank also sug­ges­ted that it no longer expec­ted a tech­nical reces­sion in the UK this year, adding that GDP «was now expec­ted to increase slightly in the second quarter».

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