UK interest rates live: Pound prices reach post-Brexit high as Bank of England decides next step

UK interest rates live: Pound prices reach post-Brexit high as Bank of England decides next step Homeowners face prospect of another increase in borrowing costs if BoE raise the base rate - Bookmark - CommentsGo to comments Become an Independent member to bookmark this article Already a member? Log in The Bank of England is expected to hike interest rates for the first time in more than three years, economists have said, as mortgage holders face a further squeeze. Rate-setters are widely expected to tighten monetary policy in a bid to tackle rising inflation in the UK economy. Traders in the financial markets are predicting that rates will increase to 4 per cent from 3.75 per cent when the Bank’s Monetary Policy Committee (MPC) announces its decision today. This would be the first time that the central bank increases borrowing costs since August 2023. The conflict in the Middle East has helped push CPI further away from the Bank’s two per cent target rate, with a surge in petrol and diesel prices a major driving force. And inflation is expected to be pushed higher this winter after Ofgem’s energy price cap rose by 3.6 per cent for a typical household on October 1 and is forecast to jump by a further 22 per cent in January. What could happen if BoE increases interest rates? Commenting on the expected interest rates hike, Ellie Henderson, an analyst for Investec, said: “We imagine that many committee members’ patience with the recent rise in inflation has worn thin. “The longer energy prices remain elevated, the greater the risk that a temporary price shock becomes more permanent; a ‘risk management’ hike could guard against this.” She cautioned that producers might “not be willing or able to shoulder the burden of higher energy prices for much longer” and that this could push up prices in shops. Pound hits post-Brexit high ahead of BoE interest rates decision The Bank of England is expected to hike interest rates for the first time in more than three years, economists have said, as mortgage holders face a further squeeze. Rate-setters are widely expected to tighten monetary policy in a bid to tackle rising inflation in the UK economy. Traders in the financial markets are predicting that rates will increase to 4 per cent from 3.75 per cent when the Bank’s Monetary Policy Committee (MPC) announces its decision today. This would be the first time that the central bank increases borrowing costs since August 2023. Join our commenting forum Join thought-provoking conversations, follow other Independent readers and see their replies Comments