The Bank of England could no longer bottle it over an interest rate rise | Larry Elliott

Inflation at 3% is not too convincing an argument to raise rates. More important is that the BoE's credibility was on the line

It's been a long, long time coming. The last time the Bank of England raised interest rates in July 2007, Sir Mervyn King was in charge at Threadneedle Street, Barack Obama had only recently said he would run to be US president and Gordon Brown had finally replaced Tony Blair as prime minister.

Official borrowing costs are now back to where they were between early 2009 and August 2016, when there was an emergency cut in rates following the Brexit vote. The recession the Bank feared did not materialise and so - with inflation above its 2% target and the unemployment rate at its lowest in more than four decades - there has been a modest tightening of policy.

Lenders have already bumped up the cost of fixed rate mortgages ahead of the Bank of England's decision to raise base rate from 0.25% to 0.5%, and mortgage borrowers on tracker and variable rates will see their monthly payments become more expensive in the coming days. "

Related: Bank of England raises UK interest rates for first time in more than a decade

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