Bank of England raises interest rates for first time since 2023

Summarised from 2 outlets · Updated 5 Nov, 13:41 · Archive

The Bank of England has raised its main interest rate by a quarter point to 4.0 per cent, the first increase since August 2023.

The Bank of England has raised its main interest rate to 4.0 per cent from 3.75 per cent, the first increase since August 2023. All nine members of the Monetary Policy Committee voted for the hike, though one backed a larger rise to 4.25 per cent. The decision responds to inflation hitting an 11-month high of 3.5 per cent in September, well above the bank's 2.0 per cent target.

The main cause behind the inflation spike has been the sharp rise in fuel costs resulting from the US-Iran conflict and bottlenecks in the Strait of Hormuz. Bank of England governor Andrew Bailey said: 'There is now enough inflationary pressure in the pipeline caused by the rise in energy prices, that an increase in bank rate is warranted.'

Bailey cautioned that the rise should not be seen as 'the first in an inevitable long sequence of hikes' but added that 'unless the conflict in the Middle East is resolved, neither does it seem likely to be the last increase.' The Bank of England expects inflation to continue accelerating before peaking at around 5.0 per cent in the second quarter of 2027.

How it is being reported

• Bank of England raises interest rate a quarter pointThe Bank of England has made its first upwards move in interest rates since August 2023.Perth Now · 5 Nov, 13:04
• Bank of England raises interest rate a quarter pointThe Bank of England has made its first upwards move in interest rates since August 2023.The West Australian · 5 Nov, 13:04

In this story: Bank of England · Andrew Bailey · United Kingdom · Iran · Strait of Hormuz · Middle East

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