Bank rates expected to rise today

It will be the twelfth consecutive time the Bank of England has raised its rates.

if as expected, the rate will go up from 4.25 per cent to 4.5 per cent today (Thursday 11 May).

The hikes in interest rates have been an attempt to control inflation which currently stands at above 10 per cent.

The rise will benefit savers but will increase costs for borrowers.

Could interest rates continue to rise? The rate is already at its highest in fourteen years. It has gone up in response to the cost of living as food prices have increased at the fastest rate for forty-five years.

Rates will rise in an attempt to control inflation which was down to 10.1 per cent in March from 10.4 per cent in February.

The bank rate increases have been applied since December 2021.

Some economists predict we may see another one or two more interest rate hikes, but we are close to seeing an end to them.

The Bank meets to discuss interest rate rises eight times a year and is under pressure to reduce inflation to 2 per cent, but at the moment prices are rising more than five times that figure.

Mortgages will be affected by the new interest rates. People can expect to pay more. An average increase will be between fifteen and twenty-four pounds a month. Those who have a fixed-rate mortgage won’t see any change.

By raising interest rates inflation is controlled, but rates should not be so high as to slow the economy down completely. Since 2008 UK interest rates have been at historically low levels, but at the moment people will have to get used to paying more.