Bank of England raises rates to 4% amid cost of living crisis
The central bank increased borrowing costs by a quarter percentage point despite household financial strain and forecasts of lower inflation.
At a glance
- Bank of England raised base rate to 4%
- Increase of 0.25 percentage points announced
- Decision made during second cost of living crisis in four years
- Office for Budget Responsibility forecasts lower inflation and weak wage growth
The Bank of England has raised its base interest rate to 4%, increasing the cost of borrowing by 0.25 percentage points. The decision comes as households face a second cost of living crisis in four years.
The rate rise contrasts with analysis from the Office for Budget Responsibility, which predicts lower inflation ahead and limited wage growth pressure.
Why it matters
Interest rate decisions affect borrowing costs for mortgages, loans and savings, directly impacting household finances during a period of economic strain.
Original reporting
- The Guardian — BusinessInterest rate rise in midst of cost of living crisis will leave many incredulous
- The Guardian — WorldInterest rate rise in midst of cost of living crisis will leave many incredulous
This brief was written with AI assistance from the reports listed above and checked against our editorial policy. Spotted an error? Request a correction.
