The Bank of England raises interest rates to 4% as inflation rises, Bloomberg reports. On Thursday, the bank raised the interest rate by 0.25 percentage points. British households have already seen living standards fall sharply as electricity and fuel prices rise. Electricity bills are expected to rise by 25% in January, when the regulated price cap will be revised, and rise again in April. The bank predicts that inflation will reach 4.9% in the second quarter of 2027, its highest level since September 2023. In a more negative scenario that includes a sharp escalation in the Middle East, inflation could reach 6.2% in the third quarter of 2027. Politico previously reported that Europe is preparing for an economic shock similar to the 2022 crisis.

The Bank of England raises interest rates to 4% as inflation rises, Bloomberg reports. On Thursday, the bank raised the interest rate by 0.25 percentage points. British households have already seen living standards fall sharply as electricity and fuel prices rise. Electricity bills are expected to rise by 25% in January, when the regulated price cap will be revised, and rise again in April. The bank predicts that inflation will reach 4.9% in the second quarter of 2027, its highest level since September 2023. In a more negative scenario that includes a sharp escalation in the Middle East, inflation could reach 6.2% in the third quarter of 2027. Politico previously reported that Europe is preparing for an economic shock similar to the 2022 crisis.