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CHANGE: Bank of England (Photo credit: PA)

FOR THE first time in ten years, the Bank of England has raised interest rates.

The official bank rate has risen from 0.25% to 0.5%, the first increase since July 2007.

The move reverses the cut in August of last year, made in the wake of the vote to leave the European Union.

As a result, almost four million households face higher mortgage interest payments after the rise, but it should give savers a modest lift in their returns.

According to BBC, as well as many of the country's 45 million savers, anyone considering buying an annuity for their pension will also see better deals.

Alongside this announcement, Bank of England has warned that Britain’s decision to leave the European Union is having a “noticeable impact on the economic outlook”.

According to The Guardian they said: "The overshoot of inflation throughout the forecast predominantly reflects the effects on import prices of the referendum-related fall in sterling. Uncertainties associated with Brexit are weighing on domestic activity, which has slowed even as global growth has risen significantly.

"And Brexit-related constraints on investment and labour supply appear to be reinforcing the marked slowdown that has been increasingly evident in recent years in the rate at which the economy can grow without generating inflationary pressures."

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