Bank of England raises UK interest rates to 4%

Hike of 0.5 percentage points lifts rates to 14-year high, but BoE says shorter and shallower recession now more likely

• Interest rates rise again but Bank of England hints at a brighter future

The Bank of England raised interest rates for a tenth consecutive time on Thursday from 3.5% to 4%, but said inflation may have peaked and a recession in the UK would be shorter and shallower than previously feared.

Piling more pressure on mortgage payers and businesses struggling to pay off their loans, the Bank's monetary policy committee (MPC) said the 0.5-percentage point rise was needed after private sector wages had risen more than the central bank's previous forecasts.