The Bank of England has raised interest rates to 1.75% from 1.25% - taking them to the highest level since January 2009 - and has warned the UK is set to enter recession this year.
Its Monetary Policy Committee (MPC) voted 8-1 in favour of the rise, as it said higher energy prices were likely to push inflation to 13% – well above the 2% target.
In minutes from the rates decision meeting, the bank said the majority of the MPC felt a “more forceful policy action was justified”, adding: “Against the backdrop of another jump in energy prices, there had been indications that inflationary pressures were becoming more persistent and broadening to more domestically driven sectors.”
