Bank of England poised to raise borrowing costs to combat inflation

Bank of England governor Andrew Bailey has steered financial markets away from predictions of a further sustained series of interest rate rises. Photograph: Maja Smiejkowska/Reuters

The Bank of England is poised to increase the cost of borrowing for households and businesses when its policymakers meet today, as fears mount that the UK economy is about to enter a long recession.

Financial markets expect a 0.5 percentage point increase in the central bank’s base rate to 3.5% as the monetary policy committee seeks to combat inflation.