Interest rates hiked to 4% in first increase in over three years

Interest rates have risen for the first time in more than three years and the Bank of England has signalled a further increase is likely unless the US-Iran war is resolved.

Rates rose to 4% from 3.75% in a bid to curb inflation mainly driven by the conflict's impact on global oil prices.

Andrew Bailey, the Bank's governor, said the decision "shouldn't be seen as the first in an inevitable long sequence of hikes", but warned "unless the conflict in the Middle East is resolved, neither does it seem likely to be the last increase".

The higher level will increase the cost of borrowing for things such as mortgages, loans and credit cards, but will also lead to higher returns on savings.