INTEREST RATES PREDICTED TO BE HELD AGAIN – Bank of England looks to balance the impact of higher rates on the UK economy
Interest rates are expected to be left unchanged as the Bank of England looks to balance the impact of higher rates on the UK economy.
Sluggish economic growth and signs that the country’s job market is slowing down have led to predictions that rates will be held at 5.25%.
Rates had been hiked previously in a bid to slow the pace of price rises and are at the highest level for 15 years.
The Bank of England, which sets rates, will reveal its decision at midday.
Money markets have placed a 92% chance that rates will be held.
Higher interest rates mean that the cost of borrowing money for things like mortgages and other loans goes up. However, it also means higher returns on savings accounts.
The Bank has been hiking rates since December 2021 in an effort to tackle inflation in the UK, which has been much higher than usual and put households under financial pressure.
Inflation, which is a measure of the rate of price rises for consumer goods, is currently at 6.7% and has fallen from its peak seen last year. However, it is still more than three times higher than the Bank of England’s 2% target.
By making it more expensive for people to borrow money, the Bank hopes households will cut back and buy fewer things and in turn lead to businesses slowing their price rises.