The latest increase is the fifth rise since December 2021, with the BoE arguing that rate rises are needed to tackle soaring inflation.
Inflation as measured by the consumer price index (CPI) is expected to rise more than previously predicted, from 9.4% in June to just over 13% in Q4 2022. The Bank still hopes CPI will fall to its 2% target in 2024.
The Bank’s monetary policy council (MPC) voted eight to one in favour of the rise. Andrew Bailey, governor of the BoE, said: “The real risk we’re responding to is that inflation becomes embedded, and it doesn’t come down in the way that we would otherwise expect. “We’ve had a domestic shock. We’ve had shrinkage in the labour
force over the last two years or so.”
Chairman of the Federation of Small Businesses, Martin McTague, said: “Many commercial, personal and professional loans that small businesses and sole traders hold are not protected by fixed rates and will move in line with the increase.”
The BoE’s deputy governor, Dave Ramsden, said the Bank will decide whether rates will be increased as the year progresses.
You might be interested in...
10 Jul 2026
After his grandad died, TC Group Holbeach’s Digital Development Manager and keen cricketer, Jake Burton, thought a good way to honour him would be to fundraise for Alzheimer’s Research UK. Five years on, he’s raised £67,000 and counting.
Learn more
How TC Group’s Jake Burton raised thousands to help fight dementia
07 Jul 2026
Could your business run without you? Explore why owner dependency is a major risk and how early succession planning can protect continuity and value.
Learn more
Succession Starts Long Before You’re Ready To Leave
07 Jul 2026
Making constant decisions is taking its toll on business owners. Explore why decision fatigue happens and how to build clarity into everyday decision-making.
Learn more
Decision Fatigue Is Not Weakness – It’s A Leadership Risk
07 Jul 2026
In a fast-moving, uncertain world, business owners need clarity, not certainty. Discover how real-time insight supports better decisions.
Learn more
Clarity Over Certainty: How Business Owners Can Regain A Sense Of Control
07 Jul 2026
In a world where certainty is no longer the norm, the businesses that succeed are those that keep moving. Drawing on insights from 1,500 UK business leaders, Stephen Watts explores how leadership is evolving.
Learn more
Why standing still in business is no longer an option
01 Jul 2026
TC Group has given a clear signal of its commitment to the success of the region by moving its team to the heart of Bournemouth Christchurch and Poole (BCP).
Learn more
TC Group moves to the heart of Bournemouth