Bank of England hikes interest rates to 3% in biggest rise since 1989

Bank fears rise may push UK economy into longer and deeper recession than the 1930s

The Bank expects inflation, which hit 10.1% in September, to peak at 11% by the end of 2022.

The Bank of England has increased the cost of borrowing by 0.75 percentage points to 3%, despite predicting that higher interest rates would push the economy into the longest recession since the 1930s.

In a split vote, the central bank’s monetary policy committee (MPC) voted by a 7-2 majority for the biggest increase in rates since 1989 to combat an inflation rate that hit 10.1% in September.