Expectations of a strengthening economy, solid employment levels, more consumer spending and the potential for wages to rise have all played a part in the decision.
The Bank’s main priority is to keep the rising cost of living – known as inflation – under control.
It uses its key interest rate, known as the Bank rate or base rate, which is the reference point for how much banks and building societies pay savers and charge borrowers in interest.
Generally, a rise in the Bank rate is good for savers and bad for borrowers – but the reality is a bit more nuanced.
The relatively small rise, from 0.5% to 0.75%, will not be particularly painful for the vast majority of householders, although debt charities say that some squeezed families will find this extra burden a real challenge.
Nevertheless, there will be both winners and losers.
The winners could include 45 million savers, some of whom have seen some interest rate improvements after the previous Bank rate rise in November.
Those planning on buying an annuity to finance their retirement are also likely to benefit.
But millions of households with variable or tracker rate mortgages are likely to see their payments increase once again.
Article taken from the BBC News Website on 02/08/2019