BoE raises rates and warns of recession The Bank of England has increased interest rates to the highest level in 13 years and warned that the cost of living crisis could push the economy into recession this year. The Bank’s Monetary Policy Committee (MPC) voted to raise the base rate from 0.75% to 1%. Three of the nine-strong MPC voted to raise rates further, calling for a 0.5% increase. The Bank expects inflation, which currently stands at 7%, to hit 10.25% by the end of the year, far exceeding its 2% target. While officials do not expect two consecutive quarters of negative growth, they predict the economy will decline by 0.25% next year. It also warned that household disposable income is projected to fall by the second largest amount since records began in 1964 this year.