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The Bank of England is expected to unveil the biggest rise in interest rates in 33 years today.
Markets expect the Monetary Policy Committee (MPC) to hike rates by 0.75 percentage points to 2.5 percent
This would be the UK’s highest increase since the financial crisis and the highest single rise in interest rates since 1989.
However, economists expect a smaller increase to 2.25 percent when announced at midday. That would be the same 0.5 percentage point change as the last increase.
Economists also expect rates to rise again in November and December, reaching 3 percent by the end of the year.
The price hike decision is a bid to keep inflation under control. It is the best tool the Bank of England has to steer inflation – currently at 9.9 per cent – back to its 2 per cent target.
What are interest rates and why are they rising?
The interest rate is a measure that tells you how much it costs to borrow money, or how much the reward is for saving.
If you borrow money, usually from a bank, the interest rate on that money is the amount you will be charged for borrowing.
This is a charge on top of the total loan amount and will be shown as a percentage of the total.
my colleague Holly Bancroft There’s more:
Everything you need to know about interest rates and how they affect you
Borrowing costs are already at their highest level in 13 years
Matt Mathers22 September 2022 08:58
Good morning and welcome to The Independent’s rolling coverage of the Bank of England’s interest rate announcement.
Analysts expect the rate to be raised by at least 0.5 percent, possibly 0.75 percent, which would be the largest increase in 30 years.
The bank’s announcement is expected around noon. We’ll bring you all the latest news and reactions as they come in.
Matt Mathers22 September 2022 08:53