Bank of England hikes rate 14th time in row on high UK inflation

The Bank of England on Thursday hiked its key interest rate for a 14th time in a row, by a quarter-point to 5.25 percent as UK inflation stays high, prolonging a cost-of-living crisis.

Policymakers "will continue to monitor closely indications of persistent inflationary pressures", the BoE said in a statement following a regular meeting that sent borrowing costs to the highest level in more than 15 years.

The pound dropped following the announcement as traders bet on whether this could be the final increase from the BoE in the current tightening cycle.

British annual inflation remains close to eight percent, far higher than in the eurozone and United States.

"It is expected to fall significantly further, to around five percent by the end of the year, accounted for by lower energy, and to a lesser degree, food and core goods price inflation," the BoE said Thursday.

"Services price inflation, however, is projected to remain elevated at close to its current rate in the near term."

The BoE is tasked by the UK government with keeping annual inflation at around two percent.

At its last meeting in June, the BoE lifted its rate by a half point. Since then, UK annual inflation has dropped to 7.9 percent from 8.7 percent but remains the highest among G7 nations.

"Inflation is falling and that's good news," BoE governor Andrew Bailey told a press conference.

"We know that inflation hits the least well-off the hardest and we need to make absolutely sure that it falls all the way back to the two-percent target."