The Newshound

Households face a fresh squeeze as the Bank of England is set to raise interest rates for the first time since 2023

Governor Andrew Bailey, who faces warnings from Barclays' chief UK economist that holding rates risks unsettling expectations and undermining confidence in the Bank.
Governor Andrew Bailey, who faces warnings from Barclays' chief UK economist that holding rates risks unsettling expectations and undermining confidence in the Bank.

The Bank of England is expected to lift its base rate from 3.75 per cent to 4 per cent on Thursday, which would be the first increase since August 2023. Governor Andrew Bailey faces near-unanimous market pressure to act after UK CPI inflation climbed to 3.5 per cent in September, its highest in 11 months. Economists warn inflation could exceed 4 per cent within months, with Ofgem's price cap projected to increase by roughly 25 per cent come January 2027.

Mortgage rates have already hit a three-year high ahead of Thursday's crunch vote.

S&P Global data showing business headcount rising for the first time in over two years raises the prospect of several further hikes into 2027, analysts say.

Barclays chief UK economist Jack Meaning warns that holding rates 'risks unsettling expectations and undermining confidence in the Bank.'

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