Despite the turmoil in the banking system, the Bank of England continued to raise interest rates. The bank expects the UK economy to avoid recession for now, but the inflation risks remain. The Bank of England raised interest rates by 25 basis points to 4.25%, which was in line with market expectations.
Bank of England Governor Andrew Bailey and his colleagues are trying to rein in soaring prices at a time when turmoil in financial markets threatens to upend the economic outlook. The Bank of England brushed aside concerns about the banking system following the rescue of two major overseas institutions, suggesting policymakers see inflation as a top priority.