At this month’s meeting, the Monetary Policy Committee (MPC) voted to raise the rate by 0.25 percentage points to 0.5% with a majority of five to four. The members in the minority wanted to raise rates to 0.75%.

The rate is anticipated to rise to 1.5% by the middle of 2023, according to the committee.

The central bank has been under pressure to increase the rate in light of rising inflation over the last few months. This was heightened last month as inflation rose to 5.4%, the highest level in nearly 30 years, and significantly above the BoE’s 2% target.

Inflation is also expected to increase further in coming months, the committee noted, with a figure closer to 6% in February and March, before it is expected to breach 7% in April.

Minutes of the meeting stated: “In the recent unprecedented circumstances, the economy has been subject to very large and repeated shocks. In particular, should recent movements prove persistent, the sharp rises in prices of global energy and tradable goods of which the United Kingdom is a net importer will necessarily weigh on UK real aggregate income and spending. This is something monetary policy is unable to prevent. The role of monetary policy is to ensure that, as such a real economic adjustment occurs, it does so consistent with achieving the 2% inflation target sustainably in the medium term, while minimising undesirable volatility in output.

“Given the current tightness of the labour market and continuing signs of greater persistence in domestic cost and price pressures, the Committee judges that an increase in Bank Rate of 0.25 percentage points is warranted at this meeting.”

The Bank of England last upped the base rate from 0.1% to 0.25% in December. The last increase before that was on 2 August 2018, and December’s increases was only the fourth hike since July 2007.

See YourMoney.com’s Why an interest rate rise will be bad news for more information about how it will impact your mortgage and savings.