The Bank of England and the Turkish central bank have left their interest rates unchanged. Both decisions were in line with economists’ expectations.
The British central bank kept the interest rate in the United Kingdom unchanged at 4.25 percent. In May, the British interest rate was lowered for the second time this year, by a quarter of a percentage point.
The interest rate in Turkey remained unchanged at a high level of 46 per cent to combat the country’s high inflation. Inflation in the country decreased in May. Consumer prices rose by 35.4 percent last month. That is the lowest level since November 2021. In April, inflation was still 37.9 percent.
Earlier this year, the Turkish central bank began lowering borrowing costs to stimulate the Turkish economy, which had recently emerged from a recession. In March, the interest rate was reduced to 42.5 percent. In April, however, the interest rate was raised again to 46 percent after an emergency meeting to counter a sharp decline in the lira.
The Turkish currency had plummeted to its lowest level ever against the US dollar after the arrest of Ekrem Imamoglu, the mayor of Istanbul. Imamoglu is seen as a major challenger to Recep Tayyip Erdogan for the Turkish presidency. A cheaper lira makes foreign products more expensive and thus threatens to fuel inflation again.