Home > News > BOE: Increase in interest rates to 5.25%

BOE: Increase in interest rates to 5.25%

The Bank of England is poised to push interest rates to 5.25% on Thursday as it tries to bring down inflation with a 14th consecutive increase in the cost of borrowing.

Amid government concerns that cost of living pressures are persistent, the Bank will likely push rates up by 0.25 percentage points to a fresh 15-year high.

The consumer prices index (CPI) fell last month but remained well above most industrial nations at 7.9% and almost four times the Bank’s 2% target.

Speculation that the monetary policy committee (MPC) will take a stricter stance and increase rates by 0.5 percentage points is a minority view in the City, according to a poll of economic analysts.

Threadneedle Street has been rapidly increasing rates from their record low since December 2021, with Russia’s invasion of Ukraine sending inflationary shock waves through the global economy.

But fears that the UK economy is suffering a slowdown in activity in response to higher borrowing costs means the MPC’s next moves will be cautious, analysts said.

UK property prices are falling at their fastest rate since 2009, according to Nationwide, while homeowners are increasingly signing up for longer mortgage terms to cope with higher monthly bills, according to housebuilder Taylor Wimpey.

The company said market conditions weakened between April and June as interest rates climbed. According to Moneyfacts, the average two-year fixed residential mortgage rate is 6.85%, while the five-year rate is 6.37%.

Business surveys have shown private sector activity slowing across the UK and most of Europe as millions of consumers and businesses struggle to cope with the extra borrowing costs.

A fall in export demand, especially from the Asia-Pacific region and China, has also hurt the UK’s manufacturing industry, which recorded its worst month in July.

A closely watched gauge of the factory sector dropped to its lowest level in 2023 and its joint-worst since May 2020, continuing a year-long slump for the industry.

The S&P Global/CIPS UK Manufacturing PMI fell to 45.3 in July, showing a sharper downturn than in June.

HICH LTD has continually raised the quality standards in the UK property survey market. Our multi-award-winning property survey service has made us the leading reference in the property survey market.

We offer property survey services of the highest quality. Using state-of-the-art equipment, we provide excellent property surveys at affordable prices. Our prices are based on the number of rooms rather than the value of the properties, so you will always get the best value for money with our services.

Please look at our Trustpilot page and see why customers have chosen us as their favourite property survey provider!

At HICH LTD, we work to serve our clients and make the world a better place for everyone. We actively collaborate with NGOs to promote environmental, social and charitable causes. If you want to know more about our efforts or how you can help, contact us at admin@hich-ltd.co.uk.

HICH LTD extends a warm invitation to contractors and service providers throughout the UK to join our network; by joining the Contractors and Service Providers Network, you will enjoy benefits such as a significant increase in customer flow, advertising on our high-traffic website, and direct contact with thousands of customers in your postcode area. Find more information here or by following the QR code in the video.