Bank of England raises interest rates to 0.25%

The Bank of England has raised interest rates for the first time in more than three years, in response to calls to tackle surging inflation.

The Monetary Policy Committee voted 8-1 in favour of the increase to 0.25%.

Rates were cut to a record low of 0.1% in March last year in response to the effects of the coronavirus pandemic.

The increase came despite fears that the Omicron variant of Covid could slow the UK economy by causing people to spend less.

The Bank said global asset prices had initially fallen in response to news of the new variant, but had since largely recovered.

The committee also voted unanimously to maintain the Bank’s asset purchase scheme at £875bn.

The last time the Bank raised interest rates was in August 2018, when they reached 0.75%.

They were then cut twice in March 2020 at the start of the pandemic.

Figures issued on Thursday showed the cost of living surged by 5.1% in the 12 months to November, up from 4.2% the month before, and its highest level since September 2011.


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