The Bank of England is expected to raise interest rates for the 11th time in a row, after yesterday’s shock rise in inflation.
It is due to announce its decision at noon, with economists and financial markets predicting that the BoE’s Monetary Policy Committee will lift interest rates to a quarter of one per cent, to 4.25%.
Any rate rise would be consistent with the BoE’s plan to battle inflation, but would have a detrimental impact on borrowers and those on tracker mortgage deals.
It comes just a day after the surprise jump in Consumer Prices Index inflation, from 10.1% in January to 10.4% in February.
Craig Erlam, a senior market analyst for OANDA, said the inflation figures came as a “crushing blow” for the BoE.
He said: “Whatever flexibility the Bank of England may have thought it would have on Thursday was wiped out by Wednesday morning’s inflation data and once more, the topic of conversation has shifted to whether 0.25 percentage points will be enough.”
