The Bank of England’s interest rate could reach as high as 3% by the end of the year, as measures are ramped up to fight inflation.
The financial markets are forecasting a much tighter UK monetary policy, after the Bank of England revised its inflation forecast to peak at more than 11% this year, The Times has reported.
An interest rate of around 3% would be the highest since 2008. The current rate was set yesterday at 1.25%, by the Bank’s monetary policy committee.
Inflation reached 9% last month, driven by the increase in gas and electricity prices since the energy price cap was increased at the beginning of April, resulting in an estimated £700 rise in the cost of utilities for the average household.
Foodservice prices in April were 10% higher than in April 2021, thanks to high energy costs and unstable global supply, the latest edition of the Foodservice Price Index from CGA and Prestige Purchasing showed earlier this month.
