UK Raises Key Interest Rate for First Time in 3 Years and 3 Months... to 4.00% a Year

All nine Monetary Policy Committee members backed a rate hike
Rate raised by 0.25 percentage points... First increase since August 2023
Inflationary pressure persists... Consumer prices rose 3.5% in September

The Bank of England (BOE), the UK's central bank, has raised its key interest rate for the first time in three years and three months. The move is seen as a response to continued inflationary pressure.

The Bank of England said it had raised its key interest rate by 0.25 percentage points to 4.00% per annum at a meeting of its Monetary Policy Committee on Nov. 5 (local time).

The Bank of England in London. London, AP-Yonhap News.

Of the nine members of the Monetary Policy Committee, eight voted to raise the rate by 0.25 percentage points. The remaining member favored a 0.50-percentage-point increase. Market experts had expected the committee to vote 7-2 in favor of a rate hike.

This was the first increase in the UK's key interest rate since August 2023, when the Bank of England raised it by 0.25 percentage points to 5.25% per annum, its highest level in 15 years. Since then, the bank had held or cut the rate. After lowering it by 0.25 percentage points in December last year, it kept the rate unchanged for six consecutive meetings from January through September this year.

However, inflationary pressure intensified after the outbreak of the Iran war in February this year. In September, the UK's consumer price inflation rate was 3.5%, well above the Bank of England's 2% inflation target. This was the highest level in 11 months.

This content was produced with the assistance of AI translation services.