Interest rates to hit 3.5% in war on 'lingering inflation'

THE Bank of England is expected to push interest rates even higher this week, putting further pressure on mortgage holders.

- Henry Saker-Clark

A meeting of the Monetary Policy Committee (MPC) on Thursday is expected to push up the Bank’s base interest rate from three per cent to 3.5 per cent, to its highest for 14 years.

The expected 0.5 percentage increase will represent a slight cooling in rate increases, after the Bank’s MPC opted for a 0.75 percentage point rise last month.

It will be the ninth time in a row that the Bank has hiked interest rates. Less than a year ago the rate was 0.1 per cent.