The Bank of England raised the interest rate by a quarter of a percentage point on Thursday, from 0.5 percent to 0.75 percent, in a bid to get a grip on galloping inflation.
Inflation hit highs unseen in three decades in the first two months of the new year, with prices on a broad assortment of essential goods including food, fuel, energy for home heating, used cars and more affected by price increases, with wages remaining largely stagnant or growing only slightly.
In mid-February, the BoE's Monetary Policy Committee said it expects inflation to continue to rise and to hit a peak of 7.25 percent in April, up from 5.5 percent in January. The committee has since updated its figures, expecting inflation to reach "around 8 percent" in Q2, 2022, "and perhaps even higher later this year."
In its minutes on the interest rate bump Thursday, the committee bizarrely started off its announcement by "condemn[ing] Russia's unprovoked invasion and the suffering inflicted on Ukraine."
The reason for this commentary was clarified later on down in the statement, which implied that the Russian military operation in Ukraine, and Western sanctions on Russian energy, would be blamed for expected "further large increases in energy and other commodity prices including food prices."
"It is also likely to exacerbate global supply chain disruptions, and has increased the uncertainty around the economic outlook significantly. Global inflationary pressures will strengthen considerably further over coming months, while growth in economies that are net energy importers, including the United Kingdom, is likely to slow," the statement said.
Russian President Vladimir Putin has addressed efforts by Western leaders to blame him and Russia for their economic woes. "I want ordinary people in Western countries to hear me too. An effort is being made to convince you that all your difficulties are the result of some kind of hostile actions by Russia, that you have to pay for the fight against the mythical Russian threat through your wallet. All of this is a lie," Putin said, speaking at a government briefing on economic matters on Wednesday.
"The truth is that the current problems that millions of people in the West face are the result of many years of actions by the ruling elites of their states, their mistakes, myopia and ambitions. These elites are not thinking about how to improve the lives of their citizens. They are obsessed with their own selfish interests and surplus profits," Putin said.