Bank of England Raises Interest Rates for First Time Since 2023
Summary
The Bank of England has raised its key interest rate to 4% for the first time since 2023 as it responds to rising global inflation driven by higher energy prices. It also warned that British households face higher fuel and energy bills next year.
Key Points
- The Bank of England raised its key interest rate by 25 basis points to 4%, its first increase since August 2023.
- Governor Andrew Bailey said the move responds to higher inflation risks caused by surging energy prices and Middle East tensions.
- The bank lifted its UK growth forecasts for 2026 and 2027 but said inflation could peak at 4.9% in the second quarter of next year.
- Millions of British households are expected to face higher fuel and energy bills from the start of next year.
