Bank of England had little alternative to interest rate rise, but has increased pressure on Treasury over cost of living

The Bank of England has announced it is raising interest rates by 0.25% to 1.25%.

Ivan Petrella, Professor of Economic Policy and Forecasting at Warwick Business School, said:

"The BoE is stepping up its efforts to tame inflation in line with other central banks around the world. Today's policy decision was largely expected.

"Tighter rates will tame inflation at the cost of weakening aggregate demand at a time when the economy is already shrinking and many sections of the population are dealing with an unprecedented cost of living crisis.

"The persistent increase in inflation left the BoE with little alternative, but this decision will add pressure on the Treasury in dealing with the cost of living crisis."