Bank of England Raises Benchmark Rate to 4.00%, First Increase in 3 Years and 3 Months
Summary
- The Bank of England said it raised its benchmark interest rate by 0.25 percentage point to 4.00% for the first time in three years and three months.
- Eight of the nine Monetary Policy Committee members supported a 0.25-percentage-point increase, while one called for a 0.50-percentage-point hike.
- The U.K.’s 3.5% consumer inflation rate in September exceeded the 2% target, providing the backdrop for the rate increase.
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The Bank of England, the U.K.’s central bank, has raised its benchmark interest rate for the first time in three years and three months.
The BOE said after a monetary policy meeting on November 5 that it lifted the benchmark rate by 0.25 percentage point to 4.00% from 3.75%. It was the central bank’s first rate increase since August 2023.
Eight of the BOE’s nine Monetary Policy Committee members backed a 0.25-percentage-point increase. The remaining member argued for a 0.50-percentage-point move. Markets had expected the BOE to raise rates in a 7-2 vote.
Persistent inflation pressures were a major factor behind the BOE’s decision to raise rates after three years and three months. The U.K.’s consumer inflation rate rose to 3.5% in September, well above the BOE’s 2% target. That marked the highest reading in 11 months.
JOON HYOUNG LEE
gilson@bloomingbit.ioCrypto Journalist based in Seoul