Bank of England reveals interest rates decision

The Bank of England reacted to mounting pressure to stabilise the economy today and implemented the first rise in interest rates for a decade.

The Monetary Policy Committee, the body responsible for setting the rate, agreed to a 0.25% increase – taking the overall rate to 0.5%.

The decision, which had been forecast by many analysts, had been one of the most anticipated for many years. It is the first increase since July 2007.

The MPC, although split in recent months about whether or not to announce an increase, had hinted that an increase might be coming sometime during the next few months.

A growing need for stability in the economy appears to have finally forced their hand.

What the decision will mean for Chancellor Philip Hammond as he prepares for his autumn budget in a few weeks time remains to be seen.

Many business groups had been hoping that the Bank might avoid any increase because of the implications it would have for many firms already struggling against mounting costs.

Today’s increase comes shortly after latest growth figures showed the economy expanded by more than expected in Q3 – up by 0.4% compared with the April to June quarter.

The MPC had said previously that a majority of its members felt an interest in rates could be justified if the economy showed signs of expansion.