Bank of England hikes rates by 25bps to 5.25%

Highest since February 2008

The Bank of England has raised interest rates by 25bps to 5.25%, bringing rates to their highest since February 2008.

In a 6-3 vote, the central bank's Monetary Policy Committee voted to hike rates by 25bps, with two voting for a 50bps hike and one voting for no change. Expectations for the peak of interest rates reached 6.5% last month after record wage growth was recorded. However, they have since fallen back following the drop in inflation throughout June, now sitting at about 6%, a level that is predicted to be reached later this year or early in 2024. Shop price inflation falls to lowest level of 2023 The MPC report noted that the 7.7% increase in pay growth was "materially above expectations...