Bank of England raises benchmark interest rate to 4 pct

LONDON, Nov. 5 (Xinhua) -- The Bank of England (BoE) announced on Thursday that it has decided to increase its benchmark interest rate by 0.25 percentage points to 4 percent, according to a statement on its official website.

The Monetary Policy Committee has voted by a majority of 8-1 to raise bank rate to 4 percent. One member voted to increase the rate by 0.5 percentage points to 4.25 percent.

It is the first time when the bank raises the rate in more than three years.

Conflict in the Middle East has disrupted transportation and supply of energy, raising its price and pushing up households' motor fuel costs and utility bills, said the BoE.

Meanwhile, inflation has risen to 3.5 percent and is expected to rise even further to about 5 percent by mid-2027 as higher energy prices have their knock-on effects, it noted.

"The economy has been more resilient and activity has been stronger than expected - this is good news, but it adds to the risk that higher energy prices affect other prices. So, we must act now to reduce their impact," the bank said.