Bank of England likely to raise rate to 4%

The Bank of England is expected to raise its key interest rate from 3.75% to 4% on Thursday. This would be the first increase since August 2023.

The reason is still elevated inflation. In September, prices rose by 3.5%, while the bank had expected a 3% reading. Rising energy costs are especially problematic, as they could eventually affect the prices of other goods as well. According to the bank's forecast, inflation could exceed 4% by early next year.

Further rate hikes are also expected in 2027, though how quickly the increases will continue remains unclear. The Bank of England will announce its decision on November 5.

Source: Reuters