Hike of 0.5 percentage points lifts rates to 14-year high but BoE says shorter and shallower recession now more likely
Interest rates rise again but Bank of England hints at a brighter future
The Bank of England has blamed the inflationary impact of higher than expected wage rises for an increase in interest rates from 3.5% to 4%, piling more pressure on mortgage payers and businesses struggling to pay off their loans.
Amid calls from unions for higher wages to protect against the worst falls in living standards for 100 years, a majority of the Bank’s monetary policy committee (MPC) said the 0.5 percentage point rise was needed after a jump in private sector wages above the central bank’s previous forecasts.