The Bank of England (BoE) has upped the base rate by 50 basis points to 4%, marking the tenth consecutive increase.

The Monetary Policy Committee voted by a majority of 7-2 to make this increase.

The members in the minority voted to keep the rate at 3.5%.

The bank rate has continued to increase since December 2021, when it stood at just 0.25%.

Last month, the Office for National Statistics reported that inflation in the UK was 10.5% in December.

December’s figure is slightly down from the 10.7% reported in November and represents ae second consecutive monthly fall.

In December, the BoE increased the base rate by 50 basis points to 3.5%.

The next MPC meeting is scheduled for 23 March.

Yesterday, the US Federal Reserve confirmed it is increasing interest rates by 0.25 percentage points.

The Federal Open Market Committee (FOMC) voted unanimously to increase the federal funds rate to a target range of 4.5% and 4.75%.

A statement from the FOMC said it will “continue to monitor the implications of incoming information for the economic outlook”.

“The committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the committee’s goals.”

“The committee’s assessments will take into account a wide range of information, including readings on labor (sic) market conditions, inflation pressures and inflation expectations, and financial and international developments.”

On today’s action by the BoE, Barrows and Forrester managing director James Forrester says: “Another bank rate hike that will see potential homebuyers crying in their avocado sandwiches.

“It’s hard to understand how the government’s quest for growth can be squared with these ridiculous and all too regular jumps in bank rate. The two are totally at odds with each other and today’s announcement is further confirmation that Andrew Bailey’s hand doesn’t know what Jeremy Hunt’s is doing.”

He continues: “The economy needs a boost as does the housing market and this obvious confusion amongst our so-called leaders is doing nothing to drag us back to being an economic leader in the world. We’re in danger of becoming a global white elephant economically and it’s frankly embarrassing.”

And Loan.co.uk chief executive Paul McGerrigan comments: “Inflation remains public enemy number one. It sits at the heart of the current economic turmoil, not least the discontent from the public sector on pay. It must be brought under control. The MPC clearly believes it will take a further 0.5 per cent base rate increase to reduce spending further and keep the downward momentum on inflation.

“This risk with this level of increase is the impact on economic output and property prices, but it’s clearly a risk the MPC is prepared to take. Forecasters believe rates will top out at 4.5 per cent and traders are starting to price-in a reduction in base rate in quarter four this year to boost output as inflation comes under control. A clear plan, but a fine balance and an unenviable task for No.10.”

Meanwhile, MT Finance director Tomer Aboody opines: “With Rishi Sunak’s government pushing to halve inflation by the end of the year, it is not unreasonable to question whether there could be an even bigger stimulus for the property market in the form of a possible reduction in interest rates from next year.

“One thing’s for sure,” he continues, “consumers are already preparing for more tough times ahead while they wait for some relief from aggressive rate rises.”