The Bank of England raised its benchmark interest rate by 25 basis points to 4.00% from 3.75%, marking the first hike since August 2023 and aligning with market expectations. The decision follows UK consumer price index inflation rising to 3.5% year-on-year in September, up from 3.1% in August, with services and core inflation remaining elevated. BoE Governor Andrew Bailey described persistent above-target inflation as "extremely frustrating" but cautioned it remains too early to assess second-round inflation effects. Analysts characterized the move as precautionary amid continued inflationary pressure. Market views on future policy diverge sharply. Some institutions anticipate multiple rate hikes next year, potentially pushing the benchmark above 4.50%. Most economists, however, expect only one additional hike followed by a wait-and-see period.