Last Updated on November 3, 2022 by Bitfinsider
Desperate times call for desperate means. The Bank of England, essentially the Federal Reserve of the United Kingdom, has boosted interest rates to their highest level in 33 years.
The Bank Rate, or the cost of borrowing money, increased by 0.75 percentage points to 3 percent. The Monetary Policy Committee (MPC) reports that the Bank of England voted 7-2 to hike interest rates to 3%.
The United Kingdom is experiencing double-digit inflation. In recent months, the economic situation has not improved. Inflation in the United Kingdom reached 10.1% in October for the second time in three months.
The MPC is responsible for determining the UK’s official interest rates.
The report of the Monetary Policy Committee stated: “Inflation is too high. It is well above our 2% target. It’s our job to make sure that inflation returns to our 2% target.”
As a result of the news, the pound sterling fell to $1.12 as investors lost trust in the currency. The pound just reached a record low of $1.04, which is another indicator of decreasing market confidence. The British pound reached a recent high versus Bitcoin, with 1 BTC equaling £18,000.
In such a setting, there has been a developing interest in cryptocurrencies. The trading volume of the British pound increased by 1,150% in September, and the United Kingdom recently hosted the Bitcoin Collective Conference, which was attended by MP Lisa Cameron, chairperson of the Crypto and Digital Assets All-Party Parliamentary Group.
Cameron stated in an interview that the United Kingdom will become a global centre for cryptocurrencies and digital assets. However, they face numerous obstacles and regulatory impediments.
The group recently rebranded stablecoins, and the new prime minister, Rishi Sunak, has expressed an interest in cryptocurrencies. Despite this, the economic climate in the United Kingdom is becoming increasingly worrisome.
Ed Conway, a British economist, stated that the United Kingdom is already in a recession, which could be the longest on record. The MPC anticipates a strong decline in inflation beginning in the middle of 2023.Bank of England boosts rates to 3%, the highest increase in 33 years
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