Households are expected to be hit with the first rise in interest rates for more than 10 years today as the Bank of England looks to cool surging inflation.
Members of the Bank’s nine-strong Monetary Policy Committee (MPC) are predicted to vote to raise rates from 0.25% to 0.5% in the first such move since July 2007.
Experts estimate that eight million Britons have never seen interest rates rise in their adult lives, with borrowing costs having languished at rock-bottom lows since the financial crisis.
It will come as a blow to mortgage borrowers on variable rate deals, although it will offer some relief to savers who have seen their nest eggs decimated by surging inflation and negligible returns.
The decision comes after Bank Governor Mark Carney has repeatedly warned in recent months that it may be “appropriate” to hike interest rates as Brexit-fuelled inflation looks set to rise further.
But a quarter point rise will only reverse the cut seen in the aftermath of the Brexit vote shock in 2016 as the Bank sought to head off turmoil in the economy.
Experts believe the voting result on the Bank’s rates committee and the commentary in its quarterly inflation forecast report will be key to whether the hike is likely to mark the start of a series of interest rate rises.
Edward Park, investment director at investment manager Brooks Macdonald, expects the Bank to pause after the predicted November hike.
He said: “We believe that any hike in November will reflect a reversal of the post-Brexit stimulus rather than the beginning of a short term series of hikes.”