The Bank of England has raised interest rates to 4% in a unanimous vote by its Monetary Policy Committee, with one member pushing for an even larger increase. The central bank warned that inflation could reach nearly 5% next year, prompting traders to increase bets on another rate hike next month.
The committee voted 8-1 to lift rates by a quarter point, with external member Catherine Mann advocating for a half-point increase to 4.25%. Governor Andrew Bailey acknowledged the possibility of further rate hikes, stating, “I can see the argument for a further increase in rates and thereafter taking a more conditional approach.”
The decision reflects growing concerns over persistent inflationary pressures, despite recent tightening measures. The bank’s warning signals that policymakers are prepared to take additional steps to curb rising prices.