Bank of England reaction: A game of 'economic tug-of-war is underway'

Interest rate increase

Industry commentators have described the Bank of England’s decision to raise interest rates by 0.5% as the start of a game of tug-of-war between the bank and the government.

Today's increase takes the base rate to 2.25% and marks the seventh consecutive hike from the BoE's Monetary Policy Committee. It is the highest level seen since 2008 and an attempt to manage soaring inflation and spiralling price rises. Bank of England raises interest rates to 2.25% The increase was less hawkish than some analysts were expecting, with the market pricing in a more aggressive 75 basis point rise ahead of the announcement. Victoria Scholar, head of investment at interactive investor, said: "The vote was by no means unanimous. There was a 5-4 split in favour of a 5...