Bank of England widely expected to raise rates to 4%

The Bank of England is widely expected to raise its benchmark interest rate from 3.75% to 4% on Thursday, November 5, its first increase since August 2023, as UK inflation rises amid higher energy and fuel costs. The decision is due at 12:00 GMT, but the reports describe an expected outcome, not a decision already made. Annual consumer price inflation reached 3.5% in September, up from 3.1% in August and above the Bank’s 2% target. Rising petrol and diesel prices have contributed to the increase. The Bank has held its rate at 3.75% since December, after cutting it last year. A Reuters poll found that 72 of 82 economists expected the Monetary Policy Committee to raise the rate to 4%. At its September meeting, the committee voted 6-3 to keep rates unchanged. The Bank is also due to publish its quarterly monetary policy update and forecasts for inflation and economic growth alongside Thursday’s decision. Higher borrowing costs can restrain spending and inflation, but also weigh on economic growth. The rate influences what banks and building societies charge for loans and mortgages, as well as the interest they offer savers. If the Bank raises the rate by a quarter point,...