06.11.2003

Bank of England raises base rate, while European Central Bank leaves rate unchanged

The Bank of England has announced an expected rise of 0.25 per cent to 3.75 per cent earlier today. The increase of the repo rate is the first in almost four years and effectively ends the long downward trend which took UK base rates to their lowest level since 1955.

The bank cited concerns that as "the global recovery is gathering momentum" it would begin to fuel inflation and given its duty to stay within the governments target of 2.5 per cent.

Some analysts and commentators thought that the economy would have sustained a full half per cent rise.

On the same day the European Central Bank decide to hold the base rate for the Euro at 2 per cent.