Bank of England expected to leave interest rates unchanged at 3.75%
The Bank of England is widely expected to keep the base interest rate at 3.75% when policymakers meet today, with inflation, energy prices and global uncertainty continuing to shap
By BBC News
The Bank of England is expected to keep its base interest rate at 3.75% when the Monetary Policy Committee announces its latest decision today, extending a run of unchanged rates as policymakers weigh persistent inflation against signs of a slowing economy.
The committee, which meets eight times a year to set UK interest rates, uses Bank Rate to help keep inflation close to its 2% target. Changes to the rate influence borrowing costs for mortgages, loans and credit cards, while also affecting the returns available on many savings accounts.
UK inflation eased to 2.6% in June but remains above the Bank’s long-term target. Policymakers are also monitoring higher energy prices linked to continued tensions in the Middle East, which could put renewed upward pressure on inflation in the months ahead.
If the Bank Rate remains unchanged, homeowners on tracker mortgages are unlikely to see any immediate change in their monthly repayments. Most borrowers, however, are on fixed-rate deals, meaning their payments will stay the same until their current mortgage term ends.
Mortgage lenders continue to price loans based on expectations for future interest rates rather than the Bank Rate alone. As a result, average fixed mortgage rates have edged higher in recent weeks as financial markets reassessed the outlook for inflation and future monetary policy.
Savers could also see little immediate change if rates are held, although competition between banks and building societies continues to support a range of fixed-term savings products offering higher returns than were available a few years ago.
The Monetary Policy Committee’s decision is due to be announced at 12pm BST. Investors, homeowners and businesses will also be looking for any indication of how policymakers view the outlook for inflation and whether interest rates are likely to remain unchanged for longer or move later this year.