Bank of England hikes interest rate for the first time since Iran war, warns inflation will near 5%
The 8-1 vote reflects mounting pressure from higher energy costs as officials warn inflation could reach about 5% next year.
- 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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176 Articles
Bank of England raises rates for first time since 2023
he Bank of England raised interest rates for the first time in over three years on Thursday and warned that at least one more increase was likely if the US-Iran conflict continues, as it started on a path that its main peers have already embarked on. British inflation is likely to reach around 5% in […]
Bank of England Increases Interest Rates for the First Time in Three Years; Oil Decline Gives Margin
LONDON (AP) — The Bank of England indicated on Thursday that the sharp drop in energy prices following the mid-term elections in the United States — if maintained — could limit the possibility of further increases...
The Bank of England raised its policy rate by 25 basis points to 4 percent, in line with market expectations. The board warned that inflation, which was 3.5 percent in September, could reach 5 percent by mid-2027.
For the first time in three years, the British central bank raised interest rates from 3.75 percent to 4 percent, hitting a much tighter tone than expected, analysts at ING Bank reported. Policymakers have now unanimously voted in favor of tightening, with several projecting further tightening. At the same time, according to ING Bank analysts, more serious disagreements may already develop around the next rate hike, which is expected in February…
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