Inflation jumped unexpectedly to 10.4% in February, according to data published yesterday.
The Bank of England is anticipated to raise interest rates for the eleventh time in less than 18 months following Wednesday’s unexpected increase in inflation.
At noon, it will reveal its latest decision as it balances the UK’s weak economy and a global banking crisis.
The financial markets anticipate a 0.25 percentage point increase to 4.25 percent.
As part of anti-inflationary measures, raising the Bank rate would put strain on many people. Especially mortgage holders, who are already being stretched by the cost-of-living crisis.
Many economists expected the Bank of England would stop raising rates as inflation steadily declined.
However, according to data released yesterday, inflation rose to 10.4% from 10.1% in February.
In October, inflation reached a 41-year high of 11.1%.
Wednesday, the US Federal Reserve raised its key interest rate by a quarter of a percentage point but signaled that further increases would be halted.
The European Central Bank also raised its three key interest rates by 50 basis points last week. Despite Credit Suisse’s financial market turmoil and Silicon Valley Bank’s failure.
While a portion of the inflation increase can be attributed to potentially one-time factors such as vegetable shortages caused by frigid weather in Spain and North Africa, the Bank of England also observed an increase in underlying inflation measures.
In December 2021, the Bank of England was the first major central bank to begin raising interest rates.
Andrew Bailey, the governor of the Bank of England, ceased using language indicating that the central bank was prepared to act decisively if the outlook indicated persistent inflationary pressures.
ING economist James Smith projected that Thursday’s rate hike would be the Bank of England’s last.
Mr. Smith stated, “Assuming broader inflation data continues to indicate a reduction in pipeline pressures. We anticipate the committee will be comfortable pausing at the next meeting in May.”
