The Bank of England has raised interest rates by half a per cent in an attempt to bring down inflation as policymakers warned that soaring prices were likely to keep driving up pay.

Amid growing criticism that the Bank has lost control of price rises, the Monetary Policy Committee (MPC) that sets interest rates voted 7-2 to lift the base rate for the 13th time from 4.5pc to 5pc.

The hike was bigger than the 0.25 percentage point increase predicted by economists and matches the rate rise seen in February. The move also takes interest rates to their highest level since 2008.

The committee, led by Governor Andrew Bailey, warned that the rapid price rises that had fed demands for pay increases “were likely to take longer to unwind than they had to emerge”.