The Bank of England has raised interest rates to their highest level in 13 years as it seems to tackle the cost of living crisis gripping the UK.
It announced an increase from 0.75 per cent to 1 per cent on Thursday, at a level which has not been seen since the aftermath of the financial crisis in early 2009.
The Bank of England’s Monetary Policy Committee (MPC) met on Thursday to discuss new interest rates as the UK faced spiraling inflation fueled by a surge in energy costs.
It voted in favor of a new 1 per cent rate with six votes to three.
Those who voted against – Jonathan Haskel, Catherine Mann, and Michael Saunders – wanted a larger increase to 1.25 per cent, the central bank said.
BREAKING: Bank of England raises interest rates to highest level in 13 years
Zoe Tidmann5 May 2022 12:02
1 per cent rise in interest rates confirmed
The Bank of England has confirmed interest rates are to rise to 1 per cent.
Zoe Tidmann5 May 2022 12:02
Midday decision approaches
Not long now until the Bank of England will confirm any changes to the interest rate. Decision expected at midday.
Zoe Tidmann5 May 2022 11:40
The interest rate is widely predicted to go up today as the Bank of England looks to curb soaring inflation.
It jumped to a 30-year high in March. anna isaacour economics editor, reported at the time:
Zoe Tidmann5 May 2022 11:15
‘Still fairly low by historic standards’
anna isaacour economics editor, has tweeted an important point to note ahead of the forecast interest rate hike today.
The predicted increase would put it at the highest level in a decade, but…
Zoe Tidmann5 May 2022 11:01
Decision comes weeks after interest rates already raised
Before the decision is announced today, here is a reminder of what happened the last time the Monetary Policy Committee met on interest rates in mid-March:
Zoe Tidmann5 May 2022 10:40
What else will the Bank of England discuss today?
The Bank of England is not only going to be looking at interest rates today.
It is also predicted to ramp up its forecasts for inflation and cut its outlook for the economy.
The Bank is also expected to clarify how it plans to sell off some of its £847 billion in government bonds, which it has built up as part of its quantitative easing program launched amid the 2008 financial crisis.
More to come around 12pm today.
Zoe Tidmann5 May 2022 10:17
Another one to eat?
Members of the Monetary Policy Committee from the Bank of England have already raised rates at each of its past three meetings to try to rein in inflation.
The one today is expected to increase interest rates to 1 per cent.
Economists from Investec, an international banking group, are penciling in another rate hike in August to 1.25 per cent.
Zoe Tidmann5 May 2022 09:46
Warning over mortgages
Paul Johnson from the Institute For Fiscal Studies has warned of the impact on people’s mortgages of the expected interest rates hike.
“We are still at historically staggeringly low levels of interest rates,” he told Radio 4’s Today programme. “So you look at it that way and think one quarter of a percent, half a percent, still a very low level, that doesn’t look very dramatic.
The director added: “On the other hand, of course, if you’ve got a mortgage and it goes up by half a percent or 1% proportionally that’s a very big increase.
“That could be doubling your mortgage interest payments over a period of time, so even small changes now, at least down the line once people certain fixed rates run through, could have really big effects on people who have got significant mortgages.”
Zoe Tidmann5 May 2022 09:23
What are we expecting today?
The Bank of England is poised to raise interest rates to their highest level in 13 years as it seeks to rein in rising living costs.
Its Monetary Policy Committee (MPC) meets on Thursday to deliver its latest decision on rates.
ben chapmanour business correspondent, has more:
Zoe Tidmann5 May 2022 08:59
George Holan is chief editor at Plainsmen Post and has articles published in many notable publications in the last decade.