Reported by BBC Business
Interest rates have risen for the first time in more than three years and the Bank of England has signalled a further increase is likely unless the US-Iran war is resolved.
Rates rose to 4% from 3.75% in a bid to curb inflation mainly driven by the conflict's impact on oil prices.
Andrew Bailey, the Bank's governor, said the decision "shouldn't be seen as the first in an inevitable long sequence of hikes", but warned "unless the conflict in the Middle East is resolved, neither does it seem likely to be the last increase".
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The higher level will increase the cost of borrowing for things such as mortgages, loans and credit cards, but will also lead to higher returns on savings.
The Bank's rate-setting committee all backed increasing interest rates, with eight out of nine voting in favour of the rise to 4%. One member wanted an even bigger increase to 4.25%.
Bailey said the rate hike was warranted due to higher energy prices, but stressed it was not the start of a series of rate rises.
The governor pointed to what happens in the Middle East as the main factor in future decisions.
"Put simply, it requires real progress towards settling the conflict in the Middle East," he said.
Bailey said he could "see the argument" for a further rate hike, before taking a "more conditional approach, dependent on the evidence on energy prices and inflation dynamics".
However, members of the rate-setting committee offered different views on the path forward.
Clare Lombardelli agreed there was "likely to be a case for a further increase in rates in the near term", but Megan Greene said any decision would depend on how inflation impacts wages, prices and the jobs market.
Alan Taylor said the rate rise was a "a risk-management 'one-for-now' insurance hike".
Inflation is well below its peak of a few years ago but has been heading back up and is expected to go higher.
It was 3.5% in the year to September 2026 , up from 3.1% the previous month and well above the central bank's 2% target.
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