BoE lifts rate for first time since 2023

The Bank of England lifted its policy rate by a quarter point to 4 percent on Thursday, its first increase since August 2023. Business Recorder reported that the move reflects mounting inflation pressure from energy costs, amid disruption to supplies linked to the Middle East conflict and attacks on Russian refineries.

The bank’s projections now put UK inflation at a possible 6.2 percent in the third quarter of next year under an extreme oil-price scenario, compared with 3.5 percent at present. Its central outlook sees inflation reaching 4.9 in the second quarter, while growth estimates rose to 1.6 percent this year and 1.3 percent next year, partly on stronger business investment and AI-related demand. Governor Andrew Bailey said further rate increases are not certain, with the path depending on energy prices and the domestic economy; the bank also noted that UK households face higher energy bills from early 2027.