The Bank of England (BOE) is expected to increase interest rates again today after an unexpected resurgence in UK inflation.
Economists are pencilling in a rise to 4.25% from 4%, with the case for an increase strengthened by official figures on Wednesday revealing a surprise jump in inflation to 10.4% last month.
The Bank of England faces a difficult balancing act, weighing up the need to rein in inflation with the worries over banking woes and the possibility they may start to clamp down on lending.
Senior market analyst for Oanda, Craig Erlam, said: “Whatever flexibility the Bank of England may have thought it would have on Thursday was wiped out by Wednesday morning’s inflation data.”
He added there is “nothing that would justify a pause” in raising interest rates.
This will be the 11th interest rate rise in a row.
So, when will the interest rates go down?
Will interest rates go down in 2023?
ING Economics suggests the Bank of England will want to see more evidence that inflationary pressures are easing up more broadly before ending its cycle of rate rises.
According to PA Media, ING Economics experts are also predicting a 0.25 percentage point increase today, but said it could be the final rise before rates fall back down.
Interest rates are reviewed roughly eight times a year according to HSBC UK.
The most recent rise was made by the BOE in February, so the next review will come in the next few months.
So you may not have to wait long for interest rates to start coming down again.
What are interest rates?
According to the Bank of England (BOE), interest is what you pay for borrowing money, and what banks pay you for saving money with them.
The BOE said: "The interest rates are shown as a percentage of the amount you borrow or save over a year.
"So if you put £100 into a savings account with a 1% interest rate, you’d have £101 a year later."
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