The Bank of England has raised interest rates by 0.5 percentage points to tackle the soaring cost of living, despite concerns that the economy is heading for a recession.
In the biggest increase in rates in 27 years, policymakers at the central bank voted to raise the base rate for a sixth time in succession to 1.75%, in line with the expectations of City economists. The decision takes UK rates to the highest level since the end of 2008.
The Bank’s monetary policy committee (MPC) has been increasing the cost of borrowing since December in response to increasing rates of inflation, made worse by the Russian invasion of Ukraine, which has sent the cost of gas rising to record highs.
Inflation increased to 9.4% in the year to June and is expected to rise further over the coming months.
More details soon …