Bank of England Set to Lift Rate to 4% as UK Inflation Hits 3.5%
Updated
Updated · bbc.co.uk · Nov 5
Bank of England Set to Lift Rate to 4% as UK Inflation Hits 3.5%
3 articles · Updated · bbc.co.uk · Nov 5
Summary
A quarter-point Bank of England rate increase to 4% is widely expected Thursday, which would be the first rise in more than three years after six straight meetings on hold.
September CPI rose to 3.5% from 3.1%, well above the Bank's 2% target, with petrol, diesel and wider energy costs linked to the Iran war driving the renewed inflation pressure.
About 510,000 tracker mortgage holders would feel the move immediately, with typical monthly repayments rising by £31; 470,000 borrowers on variable deals could also face higher bills once lenders respond.
Fixed-rate borrowers are already absorbing higher costs because lenders have priced in the move, with average two- and five-year mortgage rates at 5.96% and 5.99% on Nov. 4.
Markets will also watch the Bank's 12:00 GMT statement for guidance on what follows, as policymakers weigh sticky inflation against a sharply weaker UK growth outlook.