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Today, the Bank of England is expected to unveil the largest rate increase in 33 years.
Markets expect the Monetary Policy Committee (MPC) to increase interest rates by 0.75 percentage points to 2.5 percent.
It would be the UK’s highest rise since the financial crisis and the single highest interest rate hike since 1989.
However, economists expect a smaller rise to 2.25 percent when it is announced at midday. It would be the same 0.5 percentage point change as the last rise.
Economists also expect rates to rise again in November and December, reaching 3 percent by the end of the year.
The decision to raise interest rates is an attempt to control inflation. It is the best tool the Bank of England has to steer inflation – currently at 9.9 per cent – to its 2 per cent target.
What are interest rates and why are they rising?
The interest rate is a measure that tells you how expensive it is to borrow money, or how high the returns to saving are.
If you are borrowing money, usually from a bank, the interest rate on that money is the amount you will be charged for borrowing it.
It is a fee that is added to the total amount of the loan and will appear as a percentage of the total.
my colleague Holly Bancroft has more:
All you need to know about interest rates and how they affect you
Borrowing costs have already reached a 13-year high
Matt MathersSep 22 2022 08:58
Good morning, and welcome to The Independent’s continued coverage of the Bank of England’s announcement on interest rates.
Analysts expect the rate to rise by at least 0.5 percent, and possibly 0.75 percent, in what would be the largest rise in nearly 30 years.
The bank is expected to announce at midday. We will bring you the latest news and feedback as soon as it is received.
Matt MathersSep 22 2022 08:53