Bank of England raises bank rate to 4%

02 February 2023

The Bank of England (BoE) has announced that the bank rate has been uplifted by 0.5%, now set at 4%. The bank rate has been at its highest level since the 2008 financial crisis.

The bank rate is aligned at which the BoE lends to commercial banks. The Bank of England’s Monetary Policy Committee (MPC) agreed the rise to assist in driving down inflation. The MPC voted seven to two in favour of raising to 4%, with two members of the seven voting to maintain the bank rate at 3.5%.

Payroll professionals should bear in mind that due to this change, HM Revenue and Customs (HMRC) will uplift and revise the late payment and repayment interest rates in accordance with their guidance.

However, many uncertainties remain around the outlook of inflation reaching the 2% target. Keep a look out for the next update due on the 23 March 2023.

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