The Bank of England is not ready to stop raising interest rates as soaring food prices has kept UK inflation elevated, economists have said. UK Consumer Prices Inflation (CPI) remained firmly in double digits in March, squeezing household budgets and proving more stubborn than expected.
It means the Bank's policymakers could be prompted to raise interest rates again, from the current rate of 4.25%, when they meet on Thursday. Market expectations have risen over the past month and markets are now expecting rates to peak at either 4.75% or 5% this year.
It dashes previous hopes that the Bank could stop pushing through rate hikes earlier in the year, and means more pressure is set to be piled on already strained borrowers. Economists at Oxford Economics said they are expecting another 0.25 percentage point increase on Thursday, taking the bank rate to 4.5%.
