It's official: Bank of England raises interest rates

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Bank of England has increased interest rates for the first time in a decade today to curb the growing inflation in the economy.

Ina widely anticipated decision, the base rate has been hiked from 0.25 per cent to 0.5 per cent. Governor Mark Carney is expected to address a press conference shortly to explain the decision.

Read related story: Conflicted thoughts on the Bank of England rate hike

In a unanimous vote today, Carney and six other members of the Monetary Policy Committee voted for the hike while two members voted to keep the rates on hold.

According to media sources, the members who voted for interest rates to rise said spare capacity has eroded “a little more rapidly” than expected, meaning further domestic inflationary pressure is likely to start soon.

According to reports, the economy is growing a little faster than the Bank previously expected. It has raised its forecast for 2017 from 1.3 per cent in August to 1.5 per cent now. GDP growth is set to rise in 2018 and stay there into 2019 and 2020. That growth is partly supported by the strong global economy and rising exports, the Bank said.

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