Interest Rates Up To 1.25% As Bank Battles Rising Inflation

The Bank of England has hiked the base interest rate to 1.25 per cent, the highest rate in 13 years.

- Holly Bancroft

The Bank's monetary policy committee announced the decision yesterday in a bid to temper rising inflation and tackle poor economic growth. This is the fifth rise in a row and takes the base interest rate from 1 per cent to 1.25 per cent.

Inflation jumped to 9 per cent in the 12 months up to April, a rise of 2 per cent from March. Higher fuel and food prices, driven by the war in Ukraine, have also been pushing up the cost of living.

"The scale, pace and timing of any further increases in bank rate will reflect the committee's assessment of the economic outlook and inflationary pressures," the BoE said in a statement. "The committee will be particularly alert to indications of more persistent inflationary pressures, and will if necessary act forcefully in response."