| 28 May 2024, Tuesday |

Pressure on Bank of England to hike interest rates

The Bank of England’s policymakers are under pressure to raise interest rates in response to rising inflation.

Many analysts predict that rates will rise to 0.25 percent when the decision is announced at lunchtime on Thursday.

Since the pandemic began, the UK’s main interest rate, set by the Bank’s Monetary Policy Committee (MPC), has been at an all-time low of 0.1 percent.

However, prices have risen sharply since the economy reopened.

The Bank of England has admitted that inflation could reach 4% or even 5% before falling back.

Borrowing money in the UK is now as cheap as it has ever been, thanks to record low interest rates.

However, the tide is changing, and the era of dirt-cheap money may be coming to an end.

If the Bank raises interest rates, many people who have mortgages will face higher payments because lenders will seek to raise their rates in response to the Bank’s decision.

Savers, on the other hand, will be hoping for a better return on their investment.

So, why are interest rates expected to rise, and how high are they likely to go?