LONDON: The Bank of England raised interest rates by half a percentage point Thursday as it sought to tame double-digit inflation that is fuelling a cost-of-living crisis, public-sector strikes and fears of recession.

The bank’s monetary policy committee voted 7-2 to push its key rate to 4 per cent, approving the 10th consecutive rate increase since a post-pandemic surge in the world economy and Russia’s war in Ukraine drove inflation to 40-year highs.

Economists suggest this may be the last big rate increase for Britain’s central bank after inflation slowed to 10.5 per cent in December from a peak of 11.1 per cent two months earlier. It forecast a fall to about 4 per cent by the end of the year.

“We have done a lot on rates already. The full effect of that is still to come through, but it is too soon to declare victory just yet,” bank Gov. Andrew Bailey said at a news conference. He added, “We have seen a turning of the corner, but it’s very early days and the risks are very large.” The bank pointed to high global inflation but said it is likely to have peaked across many advanced economies, including in the UK, noting falling energy prices and fewer supply chain disruptions. The Bank of England, which noted more hikes would be required if inflation proves more persistent, said its recession forecast is less severe than previously projected.