4.25% is the new interest set by the Bank of England.

The Bank takes action to combat persistent inflation although it claims that the economy is doing better than anticipated only one month prior. The Bank of England hiked interest rates by an additional quarter point. It indicates that it no longer anticipates that the UK will enter a technical recession this year.

The decision to raise borrowing costs for the eleventh time in a row to 4.25% was included in the minutes along with the unexpected adjustment to its forecast. The decision by the monetary policy committee was made shortly after data revealed that UK inflation increased to 10.4% in February not decreased. Also there has been financial unrest as several US institutions and the Swiss investment bank Credit Suisse has experienced difficulties.

The Bank has increased borrowing costs fastest since it gained independence to determine monetary policy in 1997. Some people had predicted that the Bank could suspend these hikes after the financial turbulence. Yet the choice was very unambiguous with seven of the nine members voting in favor of the 25 basis point hike.

The minutes revealed that in contrast to its 0.4% decrease prediction from an earlier month the Bank is now much more hopeful about the economy and anticipates a slight growth in national income in the second quarter of the year. The UK would no longer be in a technical recession explained as two consecutive quarters of economic contraction. Despite the possibility of a recession being on a knife edge in February Bank of England Governor Andrew Bailey indicated that he is a bit more optimistic now and anticipates a significant decline in inflation in the coming summer.

He stated there are indications that the current inflation rate has recorded. But it's too much high. It must gradually decline so we can return to our goal. The improvement was made possible partly by lower energy prices and the budget grants from earlier this month. The UK banking system received a vote of confidence from policymakers despite the recent stock market volatility. The Financial Policy Committee of the Bank mentioned in the minutes the UK banking system was deemed to have strong capital and liquidity positions and to be in a position to continue supporting the economy under various economic conditions including during a time of higher interest rates. The FPC assessed that the UK banking sector remained resilient. It stated that headline CPI inflation had slightly surprised to the upside and that the near term path of GDP was likely to be greater than anticipated earlier explaining why seven committee members had voted for higher rates. The current bank rate setting according to two members Swati Dhingra and Silvana Tenreyro would be likely to lower inflation to far below target in the medium run. The key directive in the minutes stayed the same Further adjustment in monetary policy would be required if there were to be signs of more prolonged pressures. The Bank raising rates later this year is still expected by the markets.