The Bank of England has revealed a 0.5 percentage point interest rate increase – its ninth consecutive rise as it maintains its battle against inflation.
The decision, by its monetary policy committee (MPC), took the bank rate to 3.5% – a fresh high not seen since the 2008 financial crisis.
The move, however, represented a slowdown on the 0.75 percentage point rise that was imposed last month after inflation had leapt to a 41-year high of 11.1% on the back of rising energy and food bills.
Thursday’s interest rate hike level was widely expected by economists and financial markets given the more recent easing in the consumer prices index (CPI) measure of inflation, to 10.7%, reported on Wednesday.
It matched the rate move announced by the US Federal Reserve on Wednesday evening while it was also followed by the European Central Bank, taking the eurozone central bank’s main deposit rate to 2% from 1.5%.
The voting on the nine-member MPC made for interesting reading as it was split three ways – with financial analysts saying that mixed messages were behind a fall in the value of the pound, by a cent against the dollar, to $1.23 (£1) after the vote.
Two backed no change while one, the economist Catherine Mann, sought a repeat of November’s hike. The rest including governor Andrew Bailey all supported the 0.5 percentage point rise.
While the latest inflation rate raised hopes that the core cost of living measure had peaked, the bank is still raising its interest rate because inflationary pressures remain in the economy despite its assertion the UK is already in recession.
Policymakers would have been concerned, for example, by separate data this week showing basic wages growing at their fastest pace since 2001, if the pandemic period is excluded.
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“The labour market remains tight and there has been evidence of inflationary pressures in domestic prices and wages that could indicate greater persistence and thus justifies a further forceful monetary policy response,” the Bank said.
Rising Bank rates however, while good for savers on paper, will only add to borrowing costs in an economy already squeezed by rising prices.
Immediate pain for some homeowners
Those on tracker or standard variable rate (SVR) mortgage deals will feel the most immediate pain.
Financial information firm Moneyfacts said a Bank rate rise of 0.5 percentage points on the current average SVR of 6.40% would add approximately £1,509 onto total repayments over two years.
The rate rise is also likely to be reflected in fixed rate deals ahead – still recovering from the temporary mini-budget market mayhem of September.
The Bank warned in its Financial Stability Report earlier this week that the average mortgage repayment was to increase by £250 a month, placing more households at risk of default next year.
Financial markets see Bank rate hitting 4.6% over the next six months.
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10:03
Hunt: Economy ‘likely to get worse’
Rachel Springall, finance expert at Moneyfacts.co.uk, said: “This latest base rate rise will be disappointing news to borrowers who are already facing a cost of living crisis and recent turmoil surrounding mortgage interest rates.
“Consumers may breathe a sigh of relief to see fixed mortgage rates have started to drop in recent weeks and hope these rates will fall further.
“However, the cost to secure a new fixed deal is much higher than they may realise, as both the average two- and five-year fixed rates have increased by over 3% during the past year.
“The erratic behaviour in mortgage pricing makes it essential for borrowers to seek advice to scrutinise all the options available to them,” she wrote.
Chancellor Jeremy Hunt said of the Bank’s action: “High inflation, exacerbated by Putin’s war in Ukraine, continues to plague countries across the world, eating into people’s pay cheques and driving up food and energy prices.
“I know this is tough for people right now, but it is vital that we stick to our plan, working in lockstep with the Bank of England as they take action to return inflation to target.
“The sooner we grip inflation the better. Any action which risks permanently embedding high prices into our economy will only prolong the pain for everyone, stunting any prospect of economic recovery.”
Manchester Arena bomb plotter Hashem Abedi has been charged with three counts of attempted murder.
It comes after four prison officers were injured in an attack at the maximum security prison HMP Frankland in Co Durham on 12 April.
Abedi has also been charged with one count of assault occasioning actual bodily harm and one count of unauthorised possession of a knife or offensive weapon.
Counter Terrorism Policing North East has said it carried out a “thorough investigation” of the incident with Durham Constabulary and HMP Frankland.
He remains in prison and is due to appear at Westminster Magistrates’ Court on 18 September.
Three prison officers were taken to hospital with serious injuries following the incident.
Marnie’s first serious relationship came when she was 16-years-old.
Warning: This article contains references to strangulation, coercive control and domestic abuse.
She was naturally excited when a former friend became her first boyfriend.
But after a whirlwind few months, everything changed with a slow, determined peeling away of her personality.
“There was isolation, then it was the phone checking,” says Marnie.
As a survivor of abuse, we are not using her real name.
“When I would go out with my friends or do something, I’d get constant phone calls and messages,” she says.
“I wouldn’t be left alone to sort of enjoy my time with my friends. Sometimes he might turn up there, because I just wasn’t trusted to just go and even do something minor like get my nails done.”
Image: The internet is said to be helping to fuel a rise in domestic abuse among teens. Pic: iStock
He eventually stopped her from seeing friends, shouted at her unnecessarily, and accused her of looking at other men when they would go out.
If she ever had any alone time, he would bombard her with calls and texts; she wasn’t allowed to do anything without him knowing where she was.
He monitored her phone constantly.
“Sometimes I didn’t even know someone had messaged me.
“My mum maybe messaged to ask me where I was. He would delete the message and put my phone away, so then I wouldn’t even have a clue my mum had tried to reach me.”
The toll of what Marnie experienced was only realised 10 years later when she sought help for frequent panic attacks.
She struggled to comprehend the damage her abuser had inflicted when she was diagnosed with PTSD.
This is what psychological abuse and coercive control looks like.
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‘His hands were on my throat – he didn’t stop’
Young women and girls in the UK are increasingly falling victim, with incidents of domestic abuse spiralling among under-25s.
Exclusive data shared with Sky News, gathered by domestic abuse charity Refuge, reveals a disturbing rise in incidents between April 2024 and March 2025.
Psychological abuse was the most commonly reported form of harm, affecting 73% of young women and girls.
Of those experiencing this form of manipulation, 49% said their perpetrator had threatened to harm them and a further 35% said their abuser had threatened to kill them.
Among the 62% of 16-25 year olds surveyed who had reported suffering from physical violence, half of them said they had been strangled or suffocated.
Earlier this year, Sky News reported that school children were asking for advice on strangulation, but Kate Lexen, director of services at charity Tender, says children as young as nine are asking about violent pornography and displaying misogynistic behaviour.
Image: Kate Lexen, director of services at charity Tender
“What we’re doing is preventing what those misogynistic behaviours can then escalate onto,” Ms Lexen says.
Tender has been running workshops and lessons on healthy relationships in primary and secondary schools and colleges for over 20 years.
Children as young as nine ‘talking about strangulation’
Speaking to Sky News, Ms Lexen says new topics are being brought up in sessions, which practitioners and teachers are adapting to.
“We’re finding those Year 5 and Year 6 students, so ages 9, 10 and 11, are talking about strangulation, they’re talking about attitudes that they’ve read online and starting to bring in some of those attitudes from some of those misogynistic influencers.
“There are ways that they’re talking about and to their female teachers.
“We’re finding that from talking to teachers as well that they are really struggling to work out how to broach these topics with the students that they are working with and how to make that a really safe space and open space to have those conversations in an age-appropriate way, which can be very challenging.”
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Hidden domestic abuse deaths
Charities like Tender exist to prevent domestic abuse and sexual violence.
Ms Lexen says without tackling misogynistic behaviours “early on with effective prevention education” then the repercussions, as the data for under 25s proves, will be “astronomical”.
At Refuge, it is already evident. Elaha Walizadeh, senior programme manager for children and young people, says the charity has seen a rise in referrals since last year.
Image: Elaha Walizadeh, senior programme manager for children and young people at Refuge
“We have also seen the dynamics of abuse changing,” she adds. “So with psychological abuse being reported, we’ve seen a rise in that and non-fatal strangulation cases, we’ve seen a rise in as well.
“Our frontline workers are telling us that the young people are telling them usually abuse starts from smaller signs. So things like coercive control, where the perpetrators are stopping them from seeing friends and family. It then builds.”
Misogyny to violent behaviour might seem like a leap.
But experts and survivors are testament to the fact that it is happening.