Bank of England reaction: A game of 'economic tug-of-war is underway'

Interest rate increase

clock • 3 min read

Industry commentators have described the Bank of England’s decision to raise interest rates by 0.5% as the start of a game of tug-of-war between the bank and the government.

Today's increase takes the base rate to 2.25% and marks the seventh consecutive hike from the BoE's Monetary Policy Committee. It is the highest level seen since 2008 and an attempt to manage soaring inflation and spiralling price rises. Bank of England raises interest rates to 2.25% The increase was less hawkish than some analysts were expecting, with the market pricing in a more aggressive 75 basis point rise ahead of the announcement. Victoria Scholar, head of investment at interactive investor, said: "The vote was by no means unanimous. There was a 5-4 split in favour of a 5...

To continue reading this article...

Join Investment Week for free

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now

 

Already an Investment Week
member?

Login

More on UK

Shop prices climb in further inflation headache for UK government
UK

Shop prices climb in further inflation headache for UK government

Food inflation hits 4%

Linus Uhlig
clock 29 July 2025 • 1 min read
IMF warns Reeves faces 'difficult choices' to stick to fiscal sustainability
UK

IMF warns Reeves faces 'difficult choices' to stick to fiscal sustainability

BoE easing should continue

Linus Uhlig
clock 25 July 2025 • 2 min read
BoE data trialling underway following Ben Bernanke policymaking review
UK

BoE data trialling underway following Ben Bernanke policymaking review

Structural VAR models in progress

Eve Maddock-Jones
clock 22 July 2025 • 3 min read
Trustpilot