The Bank of England has raised interest rates for the first time in more than three years, lifting Bank Rate from 3.75% to 4% as it tries to bring inflation back under control.

The decision was announced on Thursday 5 November and taken by the Bank's Monetary Policy Committee by eight votes to one. Catherine Mann, the only member to vote against the majority, wanted a bigger increase, to 4.25%.

Why rates went up

The Bank pointed to the conflict in the Middle East, now in its ninth month, which has pushed global energy prices higher. UK consumer price inflation reached 3.5% in September, well above the Bank's 2% target, and the Bank now expects it to rise to around 5% by the middle of next year.

Governor Andrew Bailey said the increase should not be seen as the start of an inevitable run of rises, but added that another increase looked likely unless the conflict in the Middle East is resolved. Financial markets are pricing in further rises over the coming year.

What it means for borrowers

The rise will feed through to some mortgage costs. Tracker mortgage holders will see payments go up, and average two-year fixed mortgage rates had already climbed close to 6% before the decision, according to Moneyfacts figures reported this week.

The Bank also raised its growth forecasts, expecting the economy to grow by 1.6% this year and 1.3% next year. Its next decision on interest rates is due on 17 December.