Bank of England raises rate to 4%, warns of another increase

The Bank of England raised its base rate from 3.75% to 4%. It is the first increase in more than three years. The Guardian reports that the Bank also warned another rise is to come.

Eight of the nine Monetary Policy Committee members backed the quarter-point rise. The ninth, Catherine Mann, wanted a half-point rise, the Guardian reports.

The Bank says energy costs driven up by the Iran war are pushing inflation higher. The New York Times reports the Bank expects inflation to reach about 5 percent next year, well above its target. The decision came a week after the budget, according to the Guardian.

A Guardian piece notes the decision runs against Office for Budget Responsibility analysis, which predicts lower inflation and little push for wage growth. It also says many households, already in a second cost of living crisis in four years, may question the move.

BBC economics editor Faisal Islam sees one more rise as likely, but thinks that will be the last. BBC News had reported that most analysts expected the increase to 4%.