Bank of England set to lift rates to 4% after 11-month inflation high

The Bank of England is widely expected to raise its benchmark interest rate from 3.75% to 4% at its Thursday decision, which would be its first increase since August 2023. The anticipated move comes as inflation reached an 11-month high of 3.5% in September, above the Bank’s 2% target, with conflict-related disruptions and higher fuel and energy costs contributing to price pressures. Household energy bills are expected to rise further this winter, raising concerns that inflation could persist and putting added pressure on borrowers and mortgage holders. The Bank is also due to publish updated economic forecasts, with higher energy costs potentially weighing on growth.