Bank of England rate hike avoids more aggressive step

The Bank of England raised its benchmark rate to 2.25% on Thursday, matching its half-point increase last month the biggest hike in 27 years.

London:Britain's central bank has raised its key interest rate by another half-percentage point, avoiding more aggressive steps to tame inflation that the US Federal Reserve and other banks have taken. The Bank of England raised its benchmark rate to 2.25% on Thursday, matching its half-point increase last month the biggest hike in 27 years.

The decision was delayed a week as the United Kingdom mourned Queen Elizabeth II. It is the bank's seventh straight move to increase borrowing costs as rising food and energy prices fuel a cost-of-living crisis that is considered the worst in a generation.

Despite facing a slumping currency, tight labor market and inflation near its highest in four decades, officials decided against acting more boldly as large hikes threaten to tip the economy into recession. The U.K. decision comes during a busy week for central bank action.

A day earlier, the U.S. Federal Reserve hiked rates by three-quarters of a point for the third consecutive time and forecast that more large increases were ahead. Also Thursday, the Swiss central bank enacted its biggest-ever hike to its key interest rate. (AP)