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Bank of England raises interest rates for the 14th time

03 August 2023 16:42 (UTC +04:00)

The Bank of England raised interest rates by a quarter of a percentage point Thursday as inflation remains stubbornly high, APA reports citing CNN Business.

The move brings the main cost of borrowing for commercial banks in the United Kingdom to 5.25% — its highest level since February 2008 — and is the 14th consecutive hike since the central bank starting raising rates in December 2021.

It was a split decision by the bank. Six members of the monetary policy committee voted for the quarter point hike, two for a half point hike, and one for a pause.

“Recent data outturns have been mixed,” the Bank of England said in a statement. “However, some key indicators, notably wage growth, suggest that some of the risks from more persistent inflationary pressures may have begun to crystallize.”

It’s difficult news for more than 2 million of the UK’s mortgage holders, who are already facing sharp increases in their monthly mortgage bills when they are forced to refinance this year and next.

The cost of the average two-year fixed-rate mortgage was 6.85% on Thursday, compared with 3.95% last August, according to financial product comparison website Moneyfacts.