Bank of England raises rates for a fifth time, to 1.25 percent.

The Bank of England raised interest rates for the fifth time in a row on Thursday to 1.25 percent, the highest level since 2009.

Even as other major central banks around the world have recently opted for larger increases, policymakers in Britain decided to raise rates by just a quarter of a percentage point. The economy fell for a second month in a row in April. The economy is expected to contract in the second quarter.

Andrew Bailey, the governor of the central bank, had previously described officials as being on a narrow path trying to tackle inflation. inflationary pressures have grown and the bank has expressed more concern about price increases extending deeper into the economy as businesses respond to higher costs by raising their own prices and workers demand higher wages

When household electricity and gas bills are set to rise again, the annual inflation rate is expected to go above 11 percent. It would be the highest rate since the early 1980s and more than five times the bank's target. In April, the inflation rate was 9 percent.

The rate-setting committee voted for a half-point increase after three members wanted the bank to take more aggressive action.

The Fed raised interest rates by three-quarters of a point. The European Central Bank said last week that it would raise rates in July for the first time in more than a decade, but that the increase would be doubled. The Swiss National Bank raised rates by half a point.

The policymakers at the Bank of England didn't rule out the possibility of a bigger increase in interest rates in the future. According to the minutes of the bank's meeting, the committee would be particularly alert to indications of more persistent inflationary pressures.

The world is facing inflation rates unseen for decades due to supply shortages and trade disruptions caused by the war inUkraine. Oil and gas prices have gone up since Russia invaded Ukranian and the price of essential commodities has gone up as well.

In Britain, not all of the inflation can be attributed to global events.

The tight labor market is one of the causes of inflation. Wages and bonuses are going up as companies compete for staff with a record number of vacancies. Companies are raising prices as their costs go up. In September, core inflation is expected to rise to 7 percent.