03 Feb 2023
Interest rates have risen to 4% – their highest level in 14 years.
The Bank of England's Monetary Policy Committee (MPC) voted by a majority of 7 – 2 to increase the Bank Rate by 0.5 percentage points to 4%.
The Bank stated that whilst global consumer price inflation remains high, it is 'likely to have peaked across many advanced economies'.
Economists suggested that inflationary pressures and labour market shortages mean higher interest rates are still required to bring inflation back to the 2% target.
Commenting on the rise, David Bharier, Head of Research at the British Chambers of Commerce (BCC), said: 'The Bank's decision to raise interest rates for a tenth consecutive time continues its hardline approach to inflation, but this is not without serious side-effects.
'Our research shows that while inflation remains by far and away the top concern for businesses with 80% citing this in Q4 2022, concern about interest rates has risen sharply with 43% now citing this.
'With the Bank expecting inflation to slow to around 4% by the end of the year, further rate rises could now simply add to the risk of a deeper recession, outweighing the benefits.'
The MPC meets eight times a year to set interest rates policy. It will meet next on 23 March.