BoE raises interest rates to 14-year high The Bank of England has raised interest rates from 1.75% to 2.25% and indicated that Britain’s economy is now in recession. A majority of the Bank’s nine-member monetary policy committee voted to increase the key base rate by 0.5 percentage points, judging that the risks of inflationary pressures becoming entrenched outweighed the short-term dangers to the economy. The central bank had previously expected the economy to grow between July and September but it now believes it will shrink by 0.1%. The Bank's seventh rate rise in a row takes borrowing costs to their highest level since 2008.