Pound hits highest level since Brexit vote, with Bank of England expected to raise interest rates today - business live
The Bank of England has raised interest rates to 4% to combat inflation driven by the ongoing conflict in the Middle East. Meanwhile, global stock markets are experiencing volatility, with tech stocks falling amid concerns over AI spending and economic uncertainty.
Why it matters
Rising interest rates and market instability signal potential economic headwinds for consumers and investors globally.
The Bank of England has raised interest rates for the first time in three years and warned of another increase to come to combat rising inflation unleashed by the Iran war.
Eight members of the Bank’s monetary policy committee (MPC) voted for the move, which takes the base rate from 3.75% to 4%. The ninth member, Catherine Mann, preferred a more dramatic half-point increase.
The Middle East conflict has pushed oil prices persistently above $100 in recent months, as hopes have evaporated of a deal that could reopen the key strait of Hormuz .
As a result, the Bank now expects UK inflation to rise to 4.9% in the middle of next year – up from 3.2% in its last economic forecast, in July. Inflation hit 3.5% in September , as measured on the consumer prices index.
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Bank of England Raises Interest Rates to Combat Iran War Inflation
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