Bank of England announces interest rate increase

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The Bank of England has increased interest rates to 0.5 per cent in the first rise for over a decade - and signalled more increases are on the way as it looks to cool surging inflation.

Policymakers on the bank's nine-strong Monetary Policy Committee voted 7-2 in favour of the quarter point rise, which marks the first rates increase since July 2007.

The move comes as the bank looks to dampen Brexit-fuelled inflation, which it predicts will now peak at around 3.2 per cent this autumn.

The Bank's quarterly inflation report also suggested two more rate hikes were likely over the next three years to return inflation back to its two per cent target, which could see rates hit one per cent by the end of 2020.