Home > News > BoE raises UK interest rates by quarter-point to 4.25%

BoE raises UK interest rates by quarter-point to 4.25%

The Bank of England has raised interest rates by a quarter of a percentage point to 4.25% in response to higher-than-expected UK inflation and signs that Britain’s economy is holding up better than feared.

In a fortnight of heightened unease across global financial markets, the Bank’s monetary policy committee (MPC) voted by a majority of seven to two to increase the base rate for the 11th time in a row.

It came after an unexpected jump in the UK inflation rate in February to 10.4%, from 10.1% in January, fuelled by food prices increasing at the fastest pace in 45 years. The Bank’s official target for inflation is 2%.

The pound rose against the dollar as financial markets moved to anticipate one more quarter-point increase at the MPC’s next meeting in May. However, economists said a 12th and final rate increase to 4.5% hung in the balance amid signs that inflation would fall sharply over the coming months.

Rates have now risen by 4.15 percentage points since December 2021, the most aggressive tightening of UK monetary policy for decades. Threadneedle Street left open the option of a further rate increase but said it would only take action if there were signs of “persistent pressures” from inflation.

Andrew Bailey, the Bank’s governor, said there were signs that the price spiral was “peaking”, telling broadcasters: “But of course, it’s far too high. We think it’s going to come down sharply, really from the early summer onwards. But we haven’t seen that happen yet.”

In an upbeat assessment, the Bank said it was no longer forecasting a technical recession, whereby the economy shrinks for two consecutive quarters. UK gross domestic product (GDP) was now probably on track to grow slightly in the second quarter of the year, after a previous forecast of a 0.4% drop in activity.

“Back at the beginning of February, we were really on a bit of a knife-edge as to whether there would be a recession. Certainly, we thought the economy would be quite stagnant,” Bailey said. “It’s not off to the races, let’s be clear. But I’m a bit more optimistic.”

HICH LTD has continually raised the quality standards in the UK property survey market. Our multi-award-winning property survey service has made us the leading reference in the property survey market.

We offer property survey services of the highest quality. Using state-of-the-art equipment, we provide excellent property surveys at affordable prices. Our prices are based on the number of rooms rather than the value of the properties, so you will always get the best value for money with our services.

Please look at our Trustpilot page and see why customers have chosen us as their favourite property survey provider!

At HICH LTD, we work to serve our clients and make the world a better place for everyone. We actively collaborate with NGOs to promote environmental, social and charitable causes. If you want to know more about our efforts or how you can help, contact us at admin@hich-ltd.co.uk.

HICH LTD extends a warm invitation to contractors and service providers throughout the UK to join our network; by joining the Contractors and Service Providers Network, you will enjoy benefits such as a significant increase in customer flow, advertising on our high-traffic website, and direct contact with thousands of customers in your post code area. Find more information here or by following the QR code in the following video.