Bank of England raises UK interest rates to 4.5%

The Bank of England has today announced a base rate rise by 0.25 percentage points to 4.5 percent in a bid to curb rising inflation.

The Bank’s move – the 12th successive rise in the cost of borrowing since December 2021 – lifts the base rate to its highest level since 2008.

The central bank’s Monetary Policy Committee (MPC) said it no longer expects the UK economy to enter recession this year.

Mike Randall (pictured), CEO at Simply Asset Finance, commented: “Another rise for interest rates is a stark reminder that we’re not out of the woods of high inflation yet. While March’s drop in inflation shows signs of the Bank of England’s tightening cycle beginning to bear fruit, we cannot dismiss the fact that businesses are still faced with the highest rates of inflation and interest combined, which continue to hamper their growth.

“For small businesses, it’s yet another financial blow to face after a tough trading month of bank holidays, but studies are showing leaders remain as resilient as ever. 71% of SMEs in the UK are still confident of business success, and 58% expect revenues to increase in the next quarter, according to Sage and Barclays. For SMEs it’s business as usual, but as industries such as manufacturing call for long-term strategies to ensure their future success, it will be crucial to consider how to minimise the impact of this high-inflationary environment for firms.”