Bank Rate reaches 5.25% after another divided vote

The Bank of England announced a quarter-point increase in Bank Rate to 5.25% on 3 August 2023. Six Monetary Policy Committee members supported that move. Two preferred a larger increase to 5.5%, while one wanted to leave the rate at 5%. The division reflected competing judgements about inflation and the impact of earlier increases.

Borrowers face different pressures

The divided vote reflected disagreement over how much additional restraint the economy required. Households refinancing fixed-rate mortgages faced different pressures from borrowers already on variable rates. The decision raised the policy benchmark while leaving the transmission to individual loans dependent on contract terms and market pricing.