Bank of England hikes interest rates for first time since 2023

The Bank of England has raised interest rates for the first time in more than three years, warning that inflation could climb to around 5%. At its latest meeting, the Monetary Policy Committee increased the Bank’s base rate to 4% from 3.75%, the first hike since August 2023. All nine members voted for a rise, though Catherine Mann backed a larger 0.5 percentage-point increase. The decision follows a sharp jump in inflation forecasts tied to higher energy and fuel prices linked to the Iran war. Governor Andrew Bailey said further increases are likely unless the conflict is resolved, noting some price pressures are already “in the pipeline.”