UK in recession, says Bank of England as it raises interest rates to 2.25%

Threadneedle Street says the economy is heading for a second consecutive quarter of falling output. Photograph: Alastair Grant/AP

Britain’s economy is now in recession, the Bank of England has said, as it raised interest rates to tackle the worst bout of inflation for 40 years.

A majority of the Bank’s nine-member monetary policy committee (MPC) voted to increase the key base rate by 0.5 percentage points to 2.25% – its highest level since 2008 – judging that the risks of inflationary pressures becoming entrenched outweighed the short-term dangers to the economy.