The Bank of England is expected to announce its decision on interest rates at midday
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The Bank of England is expected to announce its decision on interest rates at midday
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The Bank of England has raised interest rates to their highest level in 13 years as it looks to tackle the cost of living crisis gripping the UK.
It announced an increase from 0.75 per cent to 1 per cent on Thursday, a level which has not been seen since the aftermath of the financial crisis in early 2009.
The Bank of England’s Monetary Policy Committee (MPC) voted in favour of the rise with six votes to three.
Those who opposed it - Jonathan Haskel, Catherine Mann, and Michael Saunders - wanted a larger increase to 1.25 per cent, the central bank said.
It was the fourth time in a row the committee has voted in favour of an interest rate hike, as the UK grapples with soaring inflation driven by rising energy costs.
In its report on Thursday, it also warned the economy will go into reverse and inflation- will peak at more than 10 per cent as the Ukraine war compounds cripppling living costs.
Key Points Bank of England raises interest rates to highest level in 13 years Inflation to soar to as high as 10 per cent, central bank forecasts Fourth rise in a row ‘still fairly low by historic standards’ Value of pound drops following rate hike and Bank of England forecasts What has the Bank of England forecast for the UK economy?
Show latest update 1651736505
Good morning. Welcome to our live coverage as we await the Bank of England’s decision on interest rates.
Zoe Tidman 5 May 2022 08:41
1651737543 What are we expecting today?
The Bank of England is poised to raise interest rates to their highest level in 13 years as it seeks to rein in rising living costs.
Its Monetary Policy Committee (MPC) meets on Thursday to deliver its latest decision on rates.
Ben Chapman, our business correspondent, has more:
Mortgage borrowers face living-costs squeeze as rates look set to rise Bank of England expected to raise base rate to highest level in 13 years as walks ‘very fine line’ between cooling inflation and avoiding recession
Zoe Tidman 5 May 2022 08:59
1651738987 Warning over mortgages
Paul Johnson from the Institute For Fiscal Studies has warned of the impact on people’s mortgages of the expected interest rates hike.
“We are still at historically staggeringly low levels of interest rates,” he told Radio 4’s Today programme. “So you look at it that way and think one quarter of a percent, half a percent, still a very low level, that doesn’t look very dramatic.
The director added: “On the other hand, of course, if you’ve got a mortgage and it goes up by half a percent or 1% proportionally that’s a very big increase.
“That could be doubling your mortgage interest payments over a period of time, so even small changes now, at least down the line once people certain fixed rates run through, could have really big effects on people who have got significant mortgages.”
PA
Zoe Tidman 5 May 2022 09:23
1651740388 Another one to come?
Members of the Monetary Policy Committee from the Bank of England have already raised rates at each of its past three meetings to try to rein in inflation.
The one today is expected to increase interest rates to 1 per cent.
Economists from Investec, an international banking group, are pencilling in another rate hike in August to 1.25 per cent.
Zoe Tidman 5 May 2022 09:46
1651742232 What else will the Bank of England discuss today?
The Bank of England is not only going to be looking at interest rates today.
It is also predicted to ramp up its forecasts for inflation and cut its outlook for the economy.
The Bank is also expected to clarify how it plans sell off some of its ￡847 billion in government bonds, which it has built up as part of its quantitative easing programme launched amid the 2008 financial crisis.
More to come around 12pm today.
Zoe Tidman 5 May 2022 10:17
1651743624 Decision comes weeks after interest rates already raised
Before the decision is announced today, here is a reminder of what happened the last time the Monetary Policy Committee met on interest rates in mid-March:
Bank of England raises key interest rate as pressure mounts on households War in Ukraine and fear of inflation surge cause policymakers to increase rate to 0.75 per cent
Zoe Tidman 5 May 2022 10:40
1651744884 ‘Still fairly low by historic standards'
Anna Isaac, our economics editor, has tweeted an important point to note ahead of the forecast interest rate hike today.
The predicted increase would put it at the highest level in a decade, but...
Zoe Tidman 5 May 2022 11:01
1651745718 Soaring inflation
The interest rate is widely predicted to go up today as the Bank of England looks to curb soaring inflation.
It jumped to a 30-year high last month. See here:
UK inflation rises at the fastest pace in 30 years British consumer prices rose at their fastest pace in 30 years last month, fueled by soaring prices for household energy and motor fuels
Zoe Tidman 5 May 2022 11:15
1651747236 Midday decision approaches
Not long now until the Bank of England will confirm any changes to the interest rate. Decision expected at midday.
Zoe Tidman 5 May 2022 11:40
1651748526 1 per cent rise in interest rates confirmed
The Bank of England has confirmed interest rates are to rise to 1 per cent.
Zoe Tidman 5 May 2022 12:02
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