U.K. Interest Rates Up As Bank Of England Panics

The Bank of England today raised interest rates by half a percent, in a move that exemplifies a panicked central bank. Interest rates are a blunt instrument and adjusting them abruptly and significantly hardly inspires confidence in the institution responsible. This surprise decision will have no substantial impact on inflation, but it will undoubtedly damage market and economic sentiment and repairing the resulting effects will take a long time.

In a somewhat comical response, the pound did not strengthen, which is one of the main reasons for raising interest rates—to bolster the local currency and reduce import prices. Instead it went into a trauma of randomness.