Bank of England is expected to hike interest rates to 4% on Thursday, the first rise since 2023

Borrowers face their first squeeze in over three years after the Bank of England's Monetary Policy Committee is widely expected to push the base rate from 3.75% to 4% at its Thursday November 5 meeting. The decision is being driven by CPI inflation climbing to 3.5% in September, an 11-month high, fuelled by surging petrol and diesel prices linked to Middle East conflict.

Ofgem's energy price cap already rose 3.6% on October 1 and is forecast to jump a further 22% in January.

Investec analyst Ellie Henderson warns producers may not be able to absorb higher energy costs 'for much longer', risking shop-price rises.

ICAEW chief economist Suren Thiru calls the expected move a 'precautionary hike to contain price pressures' that is now 'all but certain'.