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Bank of England expected to unveil biggest interest rate hike in 33 years – live

Related video: How is the government going to help businesses with their energy bills?

The Bank of England is expected to unveil the biggest hike in interest rates in 33 years today.

Markets expect the Monetary Policy Committee (MPC) to increase rates by 0.75 percentage points to 2.5 per cent.

It would be the highest rise that the UK has had since the financial crisis and would be the highest single increase in interest rates since 1989.

However, economists are expecting a smaller rise to 2.25 per cent when it is announced at midday. It would be the same 0.5 percentage point change as the last hike.

Economists are also expecting rates to rise again in November and December, hitting 3 per cent by the end of the year.

The decision to hike rates is a bid to keep inflation under control. It is the best tool that the Bank of England has to steer inflation – currently at 9.9 per cent – back to its 2 per cent target.


BoE to raise interest rates

The Bank of England had been due to make an announcement earlier in the month but this was postponed due to the Queen’s death.

Its monetary policy committee was scheduled meet yesterday to finalise the announcement, which is expected around midday.

Markets think the Bank will unveil the biggest hike in interest rates for over three decades.


What are interest rates and why are they rising?

An interest rate is a measure that tells you how high the cost of borrowing money is, or how high the rewards of saving are.

If you are borrowing money, typically from a bank, the interest rate on that money is the amount you will be charged for borrowing it.

It is a charge on top of the total amount of the loan and will be shown as a percentage of the overall.

My colleague Holly Bancroft has more:


Good morning

Good morning and welcome to The Independent’s rolling coverage of the Bank of England’s announcement on interest rates.

Analysts expect the rate to be hiked by at least 0.5 per cent, possibly 0.75 per cent, in what would be the biggest rise in some 30 years.

The Bank’s announcement is expected around midday. We’ll bring you all the latest news and reaction as it comes in.

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