Two members preferred to maintain the rate at 4.25%.

The MPC said will continue to monitor closely indications of persistent inflationary pressures — if there is evidence of such pressures, it confirmed that further tightening in monetary policy would be required.

Industry reacts to BoE increasing base rate to 4.25%

This section will be updated throughout the day — check regularly for more comments from industry experts

3:30pm

Vikki Jefferies, proposition director at PRIMIS:
 
“Today’s decision by the Bank of England to raise interest rates to 4.5% is no surprise, with inflation remaining stubbornly above 10% in March.

“Headlines about rising interest rates will add to the financial pressure that many consumers already feel as a result of the cost-of-living crisis, especially given the rock bottom rates they have experienced in recent years.

"It is therefore the responsibility of lenders and brokers to bring perspective to the situation and to work together to proactively secure the best outcomes for their customers.

“Advisers should consider how they can best support their customers in this regard.

"Being part of a network allows advisers to draw on a wealth of resources as well as access a broad range of products to help meet their clients’ needs.

"The support system that networks provide can be invaluable in providing optimal mortgage and protection advice at this time.”

3:00pm

Jatin Ondhia, CEO at real estate investors, Shojin: 

“Today’s quarter point rise has taken interest rates to the highest level since 2008.

“With inflation still running hot, it remains to be seen how much further monetary policy intervention will be required to restore price stability in what has been a historic series of hikes.

“Undoubtedly, investors will be hoping that the summit may be drawing near, but for now, the Bank of England’s tricky juggling act looks set to continue.

“Going into the second half of the year, agility and diversification will be key in navigating the shifting macroeconomic landscape as the tightening of financial conditions continue to feed through into the economy.”

2:00pm

Douglas Grant, group CEO at Manx Financial Group PLC:

“Today’s rise in interest rates is yet another blow to businesses struggling to manoeuvre as cashflows are squeezed.

“Stubbornly high inflation and flatlining GDP data highlighted sluggishness that may be difficult to shake off.

“Indeed, coupled with the global banking sector showing signs of weakness, SMEs must take this as yet another reminder to review their existing lending structures and ensure they are prepared for further challenges.”

1:00pm

Emma Hollingworth, managing director of mortgages at MPowered Mortgages:  
 
“It is no surprise that the Bank of England has taken today’s decision to raise the base rate to 4.5%, the highest it has been since 2008. The ramifications will be felt throughout the mortgage market, and as such, there has never been a more critical time for buyers to seek professional advice.

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“However, despite the rising interest rates, there remains healthy demand in the market, demonstrated by the 18% rise in loan approvals for house purchases between February and March and re-mortgage activity will be supported by the 1.4 million people with fixed-rate mortgages set to expire in 2023.

“Additionally, with inflation predicted to start coming down in the second half of the year, we are confident that the market will be able to weather the challenges presented by today’s interest rate rise.

“That being said, lenders and brokers must continue to work to understand the needs of their customers in a complex market, and to provide them with mortgage decisions as quickly and efficiently as possible."

12:15pm

Andrew Gething, managing director at MorganAsh:

“Although the UK economy is showing its fair share of positive indicators, the stubborn nature of inflation is clearly still too much of a worry for the Bank of England to halt its rate-rising agenda.
 
“While many forecasters suggest that we could be getting close to the peak, today’s news demonstrates that a future pause certainly isn’t guaranteed in the current environment.

“While those with fixed-rate mortgages are shielded from this outcome, it will once again be those with either tracker or variable-rate mortgages that take the biggest hit.”

“With less than 90 days to go until the start of Consumer Duty, identifying and monitoring those vulnerable customers should already be high on the agenda for firms.

“Financial stresses will form just one part of a much wider scope of vulnerability that firms will be expected to consider.”

Marylen Edwards, head of BTL lending at MT Finance:

“Considering recent events in the global financial markets, this latest rate rise was not unexpected.

“While a reduction in base rate would have been welcome news, it feels as though another increase is necessary at this moment in time to combat stubbornly high inflation and help bring back some much-needed stability.

“Hopefully this will be the last rise before we start to see a plateau.”

Alex Lyle, director of Richmond estate agency, Antony Robert:

“It is a real shame that the Bank of England felt it needed to raise interest rates again this month, as a hold would have boosted the momentum we have been seeing in the housing market, particularly since Easter.
 
“Prices have been holding up on large family homes in particular and we have found the volume of sales in the first quarter up considerably compared with the same period last year.

“Another interest rate rise, with the potential for more to come, creates uncertainty — which is not good for the market."

Mark Harris, chief executive at mortgage broker, SPF Private Clients:

“Fixed rates are influenced by future base-rate movements and therefore not directly linked to what is decided this week.

“Several lenders have reduced their high LTV fixed-rate mortgages in the past few days, which will benefit first-time buyers — while the pricing of lower LTV deals has risen on the back of higher swap rates.

“The cumulation of 12 successive rate rises is significant — a borrower with a £250,000 mortgage on a tracker pegged at 1% over base rate, will have seen their monthly payments rise from £943 in December 2021 (when base rate rose from 0.1 per cent to 0.25 per cent), to £1,535 today.

“The lender may decide to pass on none, some, all or more than the base-rate rise.

“With so much volatility in the markets, it is more important than ever that borrowers seek advice from a whole-of-market broker.”