| 21.7°C Belfast

Bank of England raises interest rates to 1.75%

Close

Bank of England, in the City of London

Bank of England, in the City of London

PA

Bank of England, in the City of London

The Bank of England has raised interest rates after announcing its latest decision on Thursday.

The Bank of England's Monetary Policy Committee has announced interest rates are rising from 1.25% to 1.75%.

Interest rates are now at their highest level since December 2008 after the biggest single rise since 1995.

It comes as the bank hopes to slow the rate at which prices are increasing. It has warned that inflation is expected to rise further this year to around 13% later this year.

The UK is set to fall into its longest recession since the financial crisis and inflation will peak at more than 13% as gas prices soar, the Bank has warned.

The Bank of England has tweeted a thread on the interest rate rise.

The BoE says "we've put up interest rates to help return inflation to our 2% target" and says it knows "the cost of living squeeze is difficult for many people".

Weekly Business Digest

Margaret Canning’s selection of the must-read business stories straight to your inbox every Tuesday morning

This field is required

In response to the rise, Chancellor of the Exchequer, Nadhim Zahawi said: “Along with many other countries the UK is facing global economic challenges and I know that these forecasts will be concerning for many people.

"Addressing the cost of living is a top priority and we have been taking action to support people through these tough times with our £37 billion package of help for households, which includes direct payments of £1,200 to the most vulnerable families and a £400 discount on energy bills for everyone.

"We are also taking important steps to get inflation under control through strong, independent monetary policy, responsible tax and spending decisions, and reforms to boost our productivity and growth. The economy recovered strongly from the pandemic, with the fastest growth in the G7 last year, and I’m confident that the action we are taking means we can also overcome these global challenges.”


Privacy