Bank of England raises interest rate to 5.25 per cent

11 01 2007 United Kingdom

After rapid growth in consumer spending and increased levels of credit, the Bank of England's Monetary Policy Committee today voted to raise bank rate again.

The Monetary Policy Committee (MPC) said that strong demand and little capacity for growth are leading to pricing pressures that will continue to drive inflation up. Inflation rose well above target to 2.7 per cent in November so the MPC decided to increase the bank’s interest rate to 5.25 per cent.

The last change in Bank Rate was an increase to 5 per cent in November 2006.

The previous change was an increase to 4.75 per cent in August 2006, the first rise in bank rate for two years.

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