The Bank of England have voted to raise UK interest rates for the first time in a decade.
Interest rates will increase by 25bps to 0.5% from 0.25%. This means the Bank have reversed the rate cut of August 2016, when it eased monetary policy to help Britain’s economy through the aftermath of the Brexit vote.
The Monetary Policy Committee voted the majority to raise UK interest rates, seven in favour and two against the decision.
The Bank of England says it only expects interest rates to rise gradually over the next three years. The minutes of today’s meetings make it clear that the MPC is moving cautiously, with it’s first interest rate rise since Gordon Brown was PM.
The Bank of England has also warned that Britain’s decision to leave the European Union is having a “noticeable impact on the economic outlook”. But despite these concerns, it has taken the plunge and raised the bank rate to 0.5%.