The Bank of England raised its benchmark interest rate by 25 basis points to 4%, its first increase since August 2023.
Why it matters
The decision raises the benchmark for borrowing costs across the UK economy. Higher rates can affect households and businesses through lending costs, while also influencing returns on cash and bonds.
Market impact
For investors, the increase is relevant to UK interest-rate expectations and the outlook for risk assets. The effect on individual assets depends on how much of the move markets had already priced in.
Frequently asked questions
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How large was the Bank of England's rate increase?
The Bank of England raised its benchmark interest rate by 25 basis points.
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When had the Bank of England last raised rates?
The increase was its first rate hike since August 2023.
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How can the rate increase affect UK borrowers?
The higher benchmark can influence lending costs for households and businesses.
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Why does the rate decision matter for cash and bond investors?
Interest rates influence the returns available on cash and bonds.
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What could determine the market reaction to the rate increase?
The effect on individual assets depends partly on how much of the move investors had already priced in.
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