Markets think the Bank of England will unveil the biggest hike in interest rates for over three decades when its decision makers gather for a delayed meeting. The Monetary Policy Committee (MPC) is expected to increase rates by 0.75 percentage points to 2.5% - it would be the highest interest rate that the UK has had since the financial crisis.
In December 2008 the base rate was slashed from 3% to 2%, it would also be the highest single increase to interest rates since 1989. Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “Investors think the most likely outcome is that the MPC will increase the Bank rate by 75bp (0.75 percentage points) on Thursday.”
But he said that economists are expecting a smaller rise, to 2.25% - the same 0.5 percentage point change as the Bank's last hike. He said: “For a start, hawkish surprises from the MPC have been far less common than dovish ones over the last year.”
