Interest rates up to 1.25% in fifth consecutive hike The Bank of England has raised interest rates by 0.25 percentage points from 1% to 1.25%, with this the fifth consecutive rise as officials attempt to ease soaring inflation. The increase to 1.25% means rates are now at their highest point in 13 years. Data shows inflation climbed to a 40-year high of 9% in the 12 months to April, a rise of 2% from March. The Bank expects to see a peak of 11% in October when the energy price cap rises again, with this far exceeding its 2% target. Six of the nine members of the Bank's Monetary Policy Committee voted to raise rates to 1.25%, but three backed a bigger increase to 1.5%. It was also revealed that the Bank expects the UK economy to shrink by 0.3% in Q2. David Bharier, head of research at the British Chambers of Commerce, said that while the decision to raise the interest rate was expected, it “will add further concern to businesses amid a weakened economic outlook, soaring cost pressures and labour shortages.”