British central bank hikes interest rates for 2nd straight session; ECB takes no action

Feb. 3 (UPI) -- Britain's central bank narrowly voted to raise interest rates on Thursday -- the first time it's done so on two consecutive meetings in nearly 20 years. The European Union's central bank, meanwhile, decided to leave rates alone.

The Bank of England's Monetary Policy Committee voted 5-4 to increase rates by 25 basis points, to 0.5%. The panel did the same at the bank's last meeting in December. The last time it ordered rate hikes in back-to-back sessions was 2004.

The Bank of England has hiked interest rates to 0.5% and is taking other measures to battle inflation.

The bank's policy committee was unanimous in wanting to increase rates. The four members who voted against the quarter-point hike wanted a larger increase.

The Bank of England noted that inflation in Britain climbed from 5.1% in November to 5.4% in December, and said it expects prices to increase to almost 6% in February and March before peaking at around 7.25% in April.

The bank said it was partly motivated to make the increase to meet its 2% inflation target and sustain economic growth.

Also Thursday, the European Central Bank decided to leave rates unchanged near zero -- although prices in the eurozone climbed by more than 5% in January.

In a statement, the bank said it expects inflation in Europe to decrease throughout 2022.

In its assessment, the Bank of England noted that global and British economic activity returned to their pre-COVID-19 levels at the end of last year -- and that it expects Britain's economy to recover this month and next from the impact of the Omicron COVID-19 variant.

The Bank of England also noted that it expects unemployment in Britain to rise to 5% due to higher energy prices and rising costs for other goods.