Bank of England imposes ninth consecutive interest rate rise to tackle inflation
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.
“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.
Please use Chrome browser for a more accessible video player
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.”
Liverpool have won the Premier League title after a 5-1 victory over Tottenham at Anfield.
Arne Slot’s men did it in impressive style, turning over Spurs in a convincing win.
It was a rocky start for the Reds after Dominic Solanke put the north London side ahead.
However, fortunes quickly changed in the first half as Liverpool scored three times without a response.
Captain Virgil van Dijk (centre) celebrates. Pic: Reuters
Salah on his knees in celebration after the final whistle. Pic: AP
Liverpool’s Harvey Elliott (below) and Jarell Quansah celebrate after full-time. Pic: PA
Slot cheers after the full-time whistle. Pic: AP
In the second half, it took until the 63rd minute for Mohamed Salah to make it 4-1 before a fifth followed.
The Reds have won the title in manager Arne Slot’s first season in charge, and move level with fierce rivals Manchester United on 20 league championships.
But it makes them arguably the most successful English club ever as they have won more European Cup or Champions League titles.
Liverpool captain Virgil van Dijk told Sky Sports after the final whistle: “It’s special and it’s something that we don’t take for granted. It’s amazing.
“A lot of emotions before the game, during the whole week, but we got the job done and we (are) truly deserved champions of England. (Liverpool is) the most beautiful club in the world and I think we deserve all of this. Let’s enjoy the next couple of weeks and let it sink in.”
Liverpool’s Kostas Tsimikas poses with a Premier League trophy cut out. Pic: Reuters
Manager Arne Slot and his team after the final whistle. Pic: AP
Slot took over last summer from Jurgen Klopp, who guided them to their previous and maiden Premier League title triumph in 2020, when the COVID-19 lockdown saw matches played behind closed doors.
He is the first Dutch manager to win the Premier League and the fifth man to do so in a debut campaign after Jose Mourinho, Carlo Ancelotti, Manuel Pellegrini, and Antonio Conte.
Speaking to Sky Sports he said: “They [the players] did an outstanding job today. The main job was to win. Everyone said we had got it already. But we had to make sure and we got over the line.”
Several players, including Alisson Becker, Trent Alexander-Arnold, Virgil van Dijk, and Mohamed Salah, played leading roles in both the 2025 and 2020 campaigns.
Van Dijk and Salah recently signed new contracts extending their careers at the club.
Mohamed Salah takes a selfie with fans after scouring the fourth Liverpool goal. Pic: AP
Fans at Anfield during the game. Pic: AP
Fans in the stands at Anfield before full-time. Pic: Reuters
Liverpool will have to wait until the final game of the season – at home to Crystal Palace on 25 May – to be presented with the Premier League trophy.
It will be the first time the club’s fans will have seen their side lift the top-flight title in person since 1990.
This breaking news story is being updated and more details will be published shortly.
Please refresh the page for the fullest version.
You can receive breaking news alerts on a smartphone or tablet via the Sky News app. You can also follow us on WhatsApp and subscribe to our YouTube channel to keep up with the latest news.
Two pro-Palestinian demonstrators have thrown red powder on Tower Bridge – just moments before leading runners in the London Marathon went past.
The protesters were arrested on suspicion of causing a public nuisance and remain in custody, said the Metropolitan Police.
A video shared by Youth Demand, which is calling for a trade embargo on Israel, shows two people jumping over a barrier that separates spectators from the race course.
The pair, wearing t-shirts that say “Youth Demand: Stop Arming Israel”, are then seen standing in the middle of the road on the bridge.
Pic: LNP
They throw red powder in the air as an official marathon car goes past displaying the race time.
A motorbike with a cameraman on board continues along the route, while a second motorbike stops and one of the riders gets off and pushes the pair out of the way, just before the men’s elite runners pass.
Several police officers then jump over the barrier and detain the pair, the footage shows.
There appeared to be no impact on the marathon.
More than 56,000 participants were expected to take part in the 26.2-mile race through the capital.
Sabastian Sawe of Kenya won the men’s elite race in a time of two hours, two minutes and 27 seconds, while Ethiopia’s Tigst Assefa shattered the women’s-only world record in two hours, 15 minutes and 50 seconds.
Assefa beat the previous best of two hours, 16 minutes and 16 seconds set last year in London by Kenyan Peres Jepchirchir.
Read more:
Sky’s Beth Rigby running marathon in honour of ‘dearest friend’
Badenoch does not rule out local coalitions with Reform
Pic: LNP
The Metropolitan Police said in a statement: “At around 10.38am, two protesters from Youth Demand jumped over barriers at Tower Bridge and threw red paint on to the road.
“Marathon event staff intervened to remove the protesters from the path of the men’s elite race which was able to pass unobstructed.”
The force added that they were “quickly supported by police officers who arrested the protesters on suspicion of causing a public nuisance”.
The Met said the paint “appeared to be chalk-based” and was not expected to “present a hazard to runners yet to pass this point”.
-
Sports3 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports1 year agoStory injured on diving stop, exits Red Sox game
-
Sports1 year agoGame 1 of WS least-watched in recorded history
-
Sports2 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports4 years ago
Team Europe easily wins 4th straight Laver Cup
-
Environment2 years agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Environment2 years agoGame-changing Lectric XPedition launched as affordable electric cargo bike
-
Business3 years agoBank of England’s extraordinary response to government policy is almost unthinkable | Ed Conway