The Newshound

Bank of England is set to hike rates to 4% on Thursday as 2.3m households face pricier mortgages

Inflation running at 3.5% — its highest in 11 months — has left the Bank of England's nine-member Monetary Policy Committee with little choice but to lift the base rate from 3.75% to 4% on Thursday, its first hike since August 2023. Iran war-driven energy costs are the primary culprit, with S&P Global finding UK factory input costs rose for the 34th consecutive month in October.

A further 22% rise in the Ofgem energy price cap is forecast for January, threatening to push inflation as high as 5% by the New Year.

More than 700,000 borrowers are already switching to new fixed-rate deals before year-end, with banks battling on razor-thin margins to win their business.

Lloyds forecasts rates will stay at 4% throughout 2027, while Barclays now pencils in an average of 4.25% for 2028 — dashing hopes of a swift return to cuts.

MoreDaily MailManufacturers battered by rising costs as interest rate hike loomsGB NewsBank of England tipped to raise interest rates this week for first time since 2023The GuardianMillions in UK brace to remortgage on worse deals as rate rise loomsCity A.M.Banks battle for mortgages ahead of looming interest rate hikeSeeking AlphaBank of England Set For First Rate Hike As Energy Shock WorsensEasternEyeBank of England set to raise interest rates for first time since 2023 - EasternEyeالمتداول العربيThe Bank of England is preparing to raise interest rates for the first time since August 2023 - المتداول العربي
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