03 November 2017
Bank of England announces first interest rate rise in a decade
The base rate of interest has risen a quarter point to 0.5%, marking the first rise since July 2007 as the Bank of England attempts to cool surging inflation.
The Monetary Policy Committee (MPC) voted 7-2 in favour of the milestone rate hike, the first increase in over a decade.
The Bank's quarterly inflation report predicts rates of inflation fuelled by Brexit will peak at around 3.2% for the last quarter of 2017.
Bank governor Mark Carney said: "It's not so much where inflation is now, but where it's going that concerns us.
"In many respects the decision today is straightforward: with inflation high, slack disappearing and the economy growing at rates above its speed limit, inflation is unlikely to return to the 2% target without some increase in interest rates."
The report also suggests that two further rate hikes are in the pipeline, potentially reaching 1% by 2020, as the bank attempts to shrink inflation back to its 2% target.
The BoE has cut growth forecasts from 1.7% to 1.6% for 2017, however, it maintains its predictions of 1.6% for 2018 and 1.7% for 2019.
The central bank says around 60% of mortgage borrowers are on fixed rate deals, and the impact on them will be "modest and gradual".
However, those on variable rate mortgages will be affected more significantly, particularly those with high value properties and little equity.