The Bank of England is set to rise one of its most influential interest rates in a move to tackle further inflation rises. The central bank is expected to raise interest rates to their highest level on Thursday as it seeks to strike a balance between tackling record inflation and not taking action, risking economic decline in the UK.
The Bank of England (BoE) base rate is often called the interest rate or Bank Rate, and sets the level of interest all other banks charge borrowers. Earlier this year, the base rate was set at 0.5%, and prior to that it was as low as 0.1%, as the BoE worked to prevent the economy slowing during the coronavirus pandemic.
In March the base rate increased to 0.75% but now there's a possibility that the rate will be hiked further to 1%, its highest level since 2009. Because the base rate impacts all other interest rates it means that when the rate is low, it costs you less to borrow money, but means you earn less on your savings.
