The meeting took place yesterday and the vote to increase the rate by 0.5pp was a majority of 7–2. This is marks the tenth consecutive increase. Two members preferred to maintain the rate at 3.5%.

The UK’s base interest rate is now the highest it has been in more than 14 years and the decision to raise the base rate to 4% has been critically received by experts.

Kevin Brown, savings specialist at Scottish Friendly, commented: “The MPC’s decision today gives us little in the way of real surprises and meets expectations from the market.

“The big question is where we go from here. Inflation in the UK is looking particularly sticky compared to international peers. Interest rates have risen like a rocket in a matter of months and may fall like a feather as inflation lingers on in 2023.

“This is compounded by high core inflation, particularly problematic for households, and which leads to the possibility that rates will stay higher for longer. With a cost-of-living crisis forcing households to become more dependent on credit for everyday spending, this will only compound the issue.

“As ever, banks and building societies are likely to raise borrowing costs quicker than the interest rates offered on savings, so the negatives of today’s decision will outweigh the positives. Nonetheless, savers and borrowers should both shop around and plan decisions in advance to get the best rates possible.

“The convergence between inflation and interest rates bodes well for savers, but possibly the best way to protect their money from losing value as price rises remain high is to consider investing for the long term, whenever possible.”

Mohsin Rashid, CEO of ZIPZERO, said: “Many had hoped the IMF’s sobering analysis earlier this week, revealing that the UK is to be the only major economy to shrink in 2023, would inspire the Bank of England to hit the brakes. Instead, the MPC’s latest increase marks the tenth in a row since 2021 and a devastating blow to British consumers and businesses.

“With the outlook on Britain’s growth so bleak, the Bank’s latest step is likely taken with great reluctance and yet taken, nonetheless. Clearly, the Bank of England has no faith in the Government’s ability to tackle inflation alone, which has remained in double-digits for months.

“Yet such increases are simply not sustainable. As the Chancellor continues to shout about making Britain the next Silicon Valley, interest rates now stand at their highest level since 2008 and life continues to get harder.”

Giles Coghlan, chief market analyst at HYCM, added: “Today’s tenth consecutive interest rate rise from the Bank of England may well be the last. The central banks has now removed the word ‘forcefully’ from its guidance, indicating that it may feel confident to not hike interest rates any further as long as inflation keeps coming down.”

Andrew Megson, CEO of My Pension Expert, said: “Another jump in interest rates, now to a 15-year high, would be great news for pension planners in times of stability – but we’re not in those times. The base rate is still less than half the rate of inflation, meaning people’s savings are losing value in real terms.”

The European Central Bank (ECB) is also set to vote on another rate hike today and is expected to follow suit with a 0.5pp increase.