The Bank of England is widely expected to raise interest rates again on Thursday with more hikes on the cards as policymakers battle to cool soaring inflation.

Members of the nine-strong Monetary Policy Committee (MPC) are set to increase rates to 0.5% from 0.25%.

It would mark the Bank’s first back-to-back increase since June 2004, coming after it lifted rates from 0.1% to 0.25% in December to try to rein in rampant inflation.

News Shopper: Bank of England, in the City of London. Picture: PABank of England, in the City of London. Picture: PA

Financial markets are now pricing in four rises in 2022, which would see rates reach 1.25% by the year end – the highest level since early 2009.

Laith Khalaf, head of investment analysis at AJ Bell, said: “The Bank of England can’t control the major factors that will push inflation up in the immediate future, such as global energy prices or elevated shipping costs.

“But a February rate hike would help persuade the market that the Bank really means business, and help to stave off embedded inflationary expectations that could spark a dreaded wage-price spiral.”

However, he said rapid rate rises would be a shock to many borrowers, estimating that 10 million people in the UK have not seen a base rate above 1% their entire adult lives.


Martin Lewis offers mortgage advice ahead of interest rate rises

Interest rate fluctuations can impact those paying off a mortgage. If you are on a fixed-rate mortgage nothing will change when the interest rate rise is introduced this week, but that’s not so for anyone on a variable rate mortgage.

Today, the Money Saving Expert Martin Lewis has issued his advice on what to do if you currently have a mortgage.

Fixed rate

Despite the fact a fixed-rate mortgage won’t change when the interest rate rise comes in, Martin suggests, if possible, locking back into yours now if it is coming to an end soon to avoid a hike in the interest you pay.


As the name suggests, if you are on a tracker mortgage, which tracks the Bank of England interest rates, your mortgage payments will increase. Martin suggests checking now to see if you can swap to a cheaper deal.

Standard variable rate

Also known as ‘discount’ mortgages, standard variable rate (SVR) mortgages move as the lender sees fit. While lenders may choose to follow the interest rate increase, it’s currently a matter of waiting to see if they do this time.

Again, Martin suggests looking into getting a fixed-rate mortgage in case interest rates increase again.

For anyone looking for a new deal, the Money Saving Expert website has a Remortgage Guide and a Mortgage Best Buys comparison tool to help you find the best tool.