The Bank of England is expected to push interest rates higher on Thursday in what analysts believe will be one of the last in a cycle of successive hikes. The decision will pile more pressure on already-strained borrowers, but with inflation beginning to edge back down off its highs, economists say there is a glimmer of hope in the economy’s more distant future.
Markets think the Bank’s monetary policy committee (MPC) will raise interest rates to 4% on Thursday, from the current rate of 3.5%. It is expected by some experts to be the penultimate base rate rise before rates peak at 4.5% or 4.25%, and then fall back down.
The Bank has been raising rates successively for more than a year. In December 2021 the base rate stood at just 0.1% as the policymakers tried to encourage consumer spending after Covid slowed down the economy. But efforts to control inflation and bring it back down to the Bank’s 2% target has led the Bank to tighten monetary policy since.
