Bank base rate increased to 0.5% with further increases predicted

The Bank of England has raised interest rates for the second time in three months to try to curb a rapid rise in the cost of living.

The increase to 0.5% from 0.25% came as the Bank said inflation was on course to hit a 30-year high. The Monetary Policy Committee's minutes show that members in the minority preferred to increase Bank Rate by 0.5 percentage points, to 0.75%.

The widely anticipated rise follows an increase in Bank Rate from 0.1% to 0.25% at the MPC's last meeting in December and the Committee’s updated central projections now show Bank Rate rising to around 1.5% by the middle of 2023.