Bank of England raises interest rates for first time in three years

The Bank of England increased interest rates on Thursday for the first time in over three years, BBC News reported. The central bank raised rates in an effort to control rising inflation linked to the war in Iran. The decision comes as the conflict continues to push up food, fuel, and energy prices across the UK and worldwide. [1]

The rate increase means borrowing costs will rise for millions of people across the UK, BBC News said. Financial experts warned that mortgages, credit cards, and personal loans could become more expensive, although savings rates may improve. Experts also expect further rate hikes over the next 18 months if the international conflict continues. [1]

Higher borrowing costs are already affecting the UK property market. As FTMQ News reported earlier, average UK house prices fell by 0.6 percent in October 2026 to £296,285. That marked the fourth consecutive monthly decline in home values, representing the fastest rate of decline in three years. [2]

Inflation driven by the war in Iran is impacting central banks globally. As FTMQ News reported previously, the Reserve Bank of India also raised its benchmark rate for the first time in over three years in October 2026, increasing its repo rate by 25 basis points to 5.50 percent. [3]