The Bank of England (BoE) has increased the base interest rate from 4% to 4.25% following an unexpected rise in inflation in February and "volatile" moves in global financial markets.
Seven members of the Bank's Monetary Policy Committee (MPC) voted in favour of the hike, while two voted to maintain the rate at 4%.
The MPC has increased interest rates 11 times in a row since December 2021 in an effort to meet the Government's 2% inflation target "in a way that helps to sustain growth and employment".
According to the Office for Budget Responsibility, inflation peaked at 11.1% in October 2022 and is expected to fall sharply by the end of 2023.
Furthermore, the BoE said that it is no longer forecasting a technical recession, saying that the UK banking system is "well placed" to support the economy.
However, the MPC did not rule out increasing the Bank rate during its next meeting in May, saying:
"The MPC will continue to monitor closely indications of persistent inflationary pressures, including the tightness of labour market conditions and the behaviour of wage growth and services inflation.
"If there were to be evidence of more persistent pressures, then further tightening in monetary policy would be required."
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