BoE raises rates by 0.5% to 1.75%

The Bank of England have today raised the key Interest rate by 0.5% to 1.75%. Raising rates by 0.5% is something not seen in the UK for over 27 years and prompted traders to call for the UK to be approaching the end of the rate hiking cycle. What scared the market was the accompanying forecast from the BoE in which they believe the UK is going to enter a protracted recession in which inflation is likely to remain very high for longer than many have given credit. This announcement prompted more investors to begin buying UK bonds in preparation for an incoming recession.