Bank of England raises interest rates to 0.5%

Rise aims to combat soaring inflation despite faltering economic recovery and deepening cost of living crisis

The Bank of England has raised interest rates for a second time in three months, to 0.5%, as it warned that surging energy bills would push inflation higher than expected, to more than 7% by April.

Warning that families faced the biggest fall in their disposable income for three decades this year, the Bank's rate-setting monetary policy committee voted by a narrow majority to raise its base rate from 0.25% to tackle soaring inflationary pressures.