Bank of Israel Raises Key Rate by 0.5% as Inflation Above 5%

YERUSHALAYIM (Reuters) – The Bank of Israel on Monday raised its benchmark interest rate by half a point, the sixth straight meeting it has increased rates to try to cool inflation that remains above 5%.

The central bank lifted its key rate to 3.25% from 2.75%. In April, policymakers began raising the rate from 0.1% and have been aggressive during a front-loading process.

Still, Israel’s annual inflation rate rose to 5.1% in October from 4.6% in September and was just shy of a 14-year high of 5.2% in July — well above the government’s 1%-3% annual target range and fueling public anger at spiking living costs.

At the same time, Israel’s economy grew an annualized 2.1% in the third quarter from the second quarter, slower than a 7.3% pace the prior three months.