Why Bank of England is raising interest rates - and the risks involved

The reason for the rate rise is inflation, which has risen to its highest level since April 2012 (3%) - beyond the govt's target figure of 2%

The Bank of England is poised to raise interest rates for the first time since July 2007. Its monetary policy committee (MPC) will meet to decide on November 2. The MPC’s last vote on the issue was a 7-2 majority for maintaining current rates, but it’s only a matter of time before rates rise.

Initially, the rise will likely be from 0.25% to 0.5%. This may not sound like much, but it could have significant implications for the UK economy. Mark Carney, the bank’s governor, is facing an uncomfortable trade-off, mulling priorities of curbing inflation versus