Borrowers face a squeeze as the Bank of England is expected to hike rates for the first time since 2023

The Bank of England's Monetary Policy Committee is set to raise the base rate from 3.75% to 4% on Thursday, November 5 — the first increase in borrowing costs since August 2023. CPI inflation hit 3.5% in September, its highest in 11 months, driven by Middle East conflict pushing petrol and diesel prices sharply higher. Analysts warn further pain looms after Ofgem's energy price cap is forecast to jump 22% in January.

Investec analyst Ellie Henderson warned the MPC's 'patience with the recent rise in inflation has worn thin'.

The rate rise would reverse a cutting cycle that brought rates down from 5.25% through five reductions to 3.75%.

Producers may soon pass higher energy costs on to shops, pushing inflation further above the Bank's 2% target.