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Bank of England hikes interest rate for the first time since Iran war, warns inflation will near 5%
The move will raise borrowing costs for households and businesses as policymakers try to curb inflation that has climbed well above the Bank’s 2% target.
- The Bank of England raised its key interest rate by 25 basis points to 4% on Thursday, marking the first increase in over three years.
- Rising inflation driven by energy costs from the Iran war prompted policymakers to act, as the Consumer Prices Index remains elevated and expected to climb further.
- The rise immediately impacts 510,000 tracker mortgage-holders, while 470,000 variable-rate mortgage holders await individual lender reactions to determine their new payments.
- Lenders have already "priced in" the rise, with average two-year fixed rates at 5.96% and five-year rates at 5.99%, though savers may see improved returns.
- Chris Cheverall, head of UK at CMC Markets, said the focus is now "what follows after" reaching 4%, as policymakers balance high inflation against weakened economic growth.
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40 Articles
40 Articles
Rising inflationary pressures are prompting the British central bank, the Bank of England, to raise interest rates on Thursday.
·Borås, Sweden
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The energy price shock hits Britain in particular, inflation has recently risen to 3.5 percent. Now the Bank of England is responding. Experts are already expecting further steps.
·Düsseldorf, Germany
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Bank of England raises interest rates to 4 per cent and warns further hikes possible
The Bank of England has raised interest rates to 4% for the first time in over three years, warning that Middle East tensions could force further hikes as inflation is forecast to peak at around 5% next year.
·Glasgow, United Kingdom
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Coverage Details
Total News Sources40
Leaning Left6Leaning Right6Center9Last UpdatedBias Distribution43% Center
Bias Distribution
- 43% of the sources are Center
43% Center
L 29%
C 43%
R 28%
Factuality
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