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The Bank of England's job is to keep inflation at 2 per cent.Bank of England chief Mark Carney today warned uncertainty over Brexit is to blame for the UK's first interest rate rise in a decade.Mike Regnier, chief executive at Yorkshire Building Society, said: 'It has been a tough few years for savers, so we're delighted to be able to pass on the full bank rate increase.'With no external shareholders to satisfy we have protected savers as far as possible during the extended period of a record low bank rate, maintaining an average interest rate on our accounts which has been consistently higher than the market average.'Our decision today to pass on the full increase to variable rate account holders reflects our mutual ethos of putting our members first.'TSB followed suit, returning interest rates on savings, mortgage and base rate linked credit card accounts - putting customers back into the position they were at in August 2016.It said interest rates on its variable rate mortgage and base rate linked credit card accounts will increase by 0.25 per cent.It said borrowers on a Yorkshire, Chelsea or Norwich & Peterborough standard variable rate (SVR) mortgage will see their rate increase by 0.25 per cent to 4.99 per cent.Accord Mortgage holders will see a cut in repayments as the variable rate is cut from 5.34 per cent to 4.99 per cent in light of today's decision.Accord Mortgages SVR from 5.34% to 4.99%, meaning borrowers on its SVR will see a reduction in monthly repayments.The Bank of England today increased interest rates to 0.5 per cent in the first rise for a decade.
Rates were cut to a new low of 0.25 per cent last summer in the aftermath of the Brexit vote amid fears of an economic slump.
The Bank of England raised interest rates for the first time in a decade at noon, lifting the cost of borrowing from 0.25 per cent to 0.5 per cent.
Governor Mark Carney signalled more increases could follow as a decade of ultra-cheap lending after the financial crisis finally began to end.
He said: 'It's not so much where inflation is now, but where it's going that concerns us.'He added: 'In many respects the decision today is straightforward: with inflation high, slack disappearing and the economy growing at rates above its speed limit, inflation is unlikely to return to the 2 per cent target without some increase in interest rates.'Of course, these are not normal times.
Brexit will redefine the UK's relationship with our largest trade and investment partner.'The Governor said: 'With unemployment at a 42-year low, inflation running above target and growth just above its new, lower speed limit, the time has come to ease our foot off the accelerator.' In a statement announcing the decision, the Monetary Policy Committee said its forecast was still that inflation was at its peak of 3 per cent and that economic growth would be 'modest'. It said: 'Monetary policy cannot prevent either the necessary real adjustment as the United Kingdom moves towards its new international trading arrangements or the weaker real income growth that is likely to accompany that adjustment over the next few years.'It can, however, support the economy during the adjustment process.' In a statement, the Yorkshire Building Society said it was increasing savings rates by 0.25 per cent.