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The Bank of England is expected to announce the biggest rate hike in 33 years today.
Markets expect the Monetary Policy Committee (MPC) to raise interest rates by 0.75 percentage points to 2.5%.
That would be Britain’s highest rise since the financial crisis and the highest single rate hike since 1989.
Economists, however, expected gains to edge up to 2.25% when it was announced at noon. That would be the same 0.5 percentage point as the last rate hike.
Economists also expect interest rates to rise again in November and December, reaching 3 percent by the end of the year.
The decision to raise interest rates is to control inflation. This is the best tool the Bank of England has to guide inflation (currently at 9.9%) to its 2% target.
What are interest rates and why are they rising?
The interest rate is a measure that tells you how much it costs to borrow money, or how much you can pay back on saving.
If you borrow money, usually from a bank, the interest rate on that money is the amount you pay when you borrow the money.
This is a fee on top of the total loan amount and will be displayed as a percentage of the total amount.
My colleagues Holly Bancroft There are more:
Everything you need to know about interest rates and how they affect you
Borrowing costs have reached their highest level in 13 years
Matt MathersSeptember 22, 2022 08:58
Good morning and welcome to The Independent’s rolling coverage of the Bank of England interest rate announcement.
Analysts expect rates to rise by at least 0.5%, and possibly 0.75%, which would be the biggest increase in about 30 years.
The bank is expected to make an announcement around noon. We’ll bring you all the latest news and reactions.
Matt MathersSeptember 22, 2022 08:53