More pain for Britons as Bank of England hikes interest rates by 0.5%

Britons face more pain today after the Bank of England pumped up interest rates further to combat rampant inflation.

The base rate is going up by another 0.5 percentage points to 2.25 per cent – the highest for 14 years – but the Bank stopped short of the 0.75 percentage point rise many had expected.

In a development that could spook markets, the Monetary Policy Committee was split three ways on what to do. Governor Andrew Bailey and four colleagues voted for the half-point increase, while three members wanted a larger hike, and one backed a 0.25 percentage point bump.    

The move will heap misery on mortgage-payers and make borrowing more expensive for the government – just as Chancellor Kwasi Kwarteng prepares to spend hundreds of billions of pounds on energy bills and tax cuts in his mini-Budget tomorrow.

The lower rise came despite the Bank being increasingly desperate to show it is committed to getting a grip on inflation, which at 9.9 per cent is nearly five times its target.

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Written by Bourbiza Mohamed

A technology enthusiast and a passionate writer in the field of information technology, cyber security, and blockchain

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