The Bank of England's quarter point rise is the fifth since August last year

The Bank of England has put UK interest rates up a quarter point to 5.75% in its continuing attempt to combat inflation.

Bank of England

The widely predicted rate rise is the fifth since August last year. Interest rates were set at 5.5% on 10 May, but the Monetary Policy Committee felt a further rise was necessary to ensure inflation falls to the government target of 2% later this year. The Consumer Price Index inflation rate was most recently measured at 2.5%.

UK house prices have been steadily rising, particularly in the London market. According to Savills, the price of a new home has risen by 10.7% in the last year, with London prices rising by 8.8% in the last quarter alone.

However the Halifax last week said house prices rose by only 0.4% in June, and predicted that the property market was beginning to cool down as a result of the Bank of England’s actions. Taylor Wimpey, Berkeley, Land Securities and British Land have all warned of a slowdown before the latest rate rise.

Today’s rise will see monthly payments on an average £100,000 mortgage rise by £16.