Interest rates rise to 4% from 3.5%, the highest level in 14 years
Publish Date: 02 February 2023
By Jade Shrubsole
Further reading
Today was The Bank of Englands press conference annoucing their full Monetary Policy Report.
The Bank of England raised its base rate from 3.5% to 4% - the highest in 14 years.
They report that the UK is set to enter recession this year but this will be shorter than previously thought. The Bank of England expects the economy to "fall slightly" in 2023 as energy costs and other prices continue to ease.
(Source Bank of England)
It also forecasts that the inflation rate will continue to slow this year and firms are likely to hold off on making redundancies.
(Source Bank of England)
A higher interest rate will be welcomed by savers, but have a knock-on effect for those with mortgages, credit card debt and bank loans, The 4% rise means people with a typical tracker mortgage will pay about £49 more a month - while those on a variable mortgage will pay another £31 a month.
The Bank says the UK is still set to enter recession this year, but this will be shorter than previously thought. The slump is now expected to last just over a year rather than almost two as energy bills fall and price rises slow.
To read the full Monetary Policy Report click here
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