Bank of England raises base rate

The Bank of Eng­land (BoE) has raised UK inter­est rates by half a per­cent­age point to 3.5%.

It is the ninth con­sec­u­tive increase and takes the base rate to its high­est lev­el for 14 years as the Bank bat­tles to stem soar­ing prices.

The Bank’s Mon­e­tary Pol­i­cy Com­mit­tee (MPC) vot­ed 6–3 in favour of putting rates up by 0.5%. The BoE also warned that fur­ther increas­es may be nec­es­sary to tack­le what it fears may be per­sis­tent domes­tic infla­tion­ary pres­sures from prices and wages.

Com­ment­ing on the rise, Alpesh Pale­ja, Lead Econ­o­mist at the Con­fed­er­a­tion of British Indus­try (CBI), said:

‘Anoth­er big inter­est rate rise from the BoE does­n’t come as a sur­prise in the face of his­tor­i­cal­ly high infla­tion.

‘How­ev­er, with glob­al price pres­sures start­ing to wane along with the econ­o­my set to fall into reces­sion, it is like­ly that we’ll see small­er inter­est rate ris­es for the fore­see­able future. Nonethe­less, high infla­tion and weak­en­ing activ­i­ty will con­tin­ue into 2023, putting strain on many house­holds and busi­ness­es.’

Inter­net link: Bank of Eng­land web­site