Bank of England has made the largest rate hike since 1989

The Bank of England raised interest rates by 75 basis points, the largest single increase since 1989, but simultaneously showed an accommodating tone as policymakers tried to mitigate market expectations for a further tightening of aggressive monetary policy.

The 75 basis point increase brings the bank rate to 3%, its eighth consecutive increase.

The Monetary Policy Committee (MPC) has signaled a lot of caution on the next moves as it fears a prolonged recession. “The latest MPC projections describe a very challenging outlook for the UK economy,” the BOE said in a statement. “It is expected to be in recession for an extended period.”