Bank of England lifts interest rates again as food prices stay higher for longer

UK inflation is expected to fall slower than previously thought as food prices remain stubbornly high, the Bank of England has said, as it raised interest rates for the 12th time in a row.

By Anna Wise, PA Business Reporter

Published 11th May 2023, 12:12 BST

Updated 11th May 2023, 12:13 BST

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Seven members of the Bank's Monetary Policy Committee (MPC) voted to increase the base interest rate to 4.5% from 4.25%.

Food prices have stayed higher for longer than expected, the Bank said, partly due to Russia's war in Ukraine and poor harvests in some European countries, ramping up the cost of living for households across the UK.It means Consumer Prices Index (CPI) inflation is expected to decline less rapidly than the Bank predicted in its last report in February.

Inflation is still expected to drop sharply from April this year, as energy prices decline and household bills are subsidised, the MPC said."There remain considerable uncertainties around the pace at which CPI inflation will return sustainably to the 2% target," it added.

Bank of England Food Prices Russia Ukraine Inflation