The Bank of England (BoE) has raised interest rates for the 11th time in a row.
Rates were to 4.25 per cent – a rise of 0.25 percentage points.
The increase came after inflation grew unexpectedly last month.
Rates have gone up for the last 18 months.
The BoE warns more rises may be needed to cut inflation.
The BoE said in a statement:
“If there were to be evidence of more persistent pressures, then further tightening in monetary policy would be required.
“The UK banking system maintains robust capital and strong liquidity positions, and is well placed to continue supporting the economy in a wide range of economic scenarios, including in a period of higher interest rates.”
It was accepted there had been “large and volatile moves in the global financial markets” after the collapse of Silicon Valley Bank in the US and the rescue of Credit Suisse in Europe.
Two of the nine members of the bank’s Monetary Policy Committee voted for rates to stay as they were.
Swati Dhingra and Silvana Tenreyro argued that the full impact of previous rate rises was still filtering through.
They warned that over-tightening would speed up the point when recent increases would need to be reversed.
The Bank said:
“We will continue to watch out for signs of persistent inflationary pressures, including the tightness of the labour market conditions and the behaviour of wage growth and services inflation”.