Bank of England expected to hike interest rates in largest rise for almost 30 years

Bank of England expected to hike interest rates in largest rise for almost 30 years
paul hawkins interest rates
Tom Evans

By Tom Evans

Published: 04/08/2022

- 07:19

Updated: 14/02/2023

- 10:46

The Bank of England is expected to announce its largest interest rate rise in almost 30 years at midday on Thursday as the UK faces soaring inflation

The Bank is poised to confirm another hike in the cost of borrowing on Thursday, as almost two-thirds of the public say they are concerned about rising interest rates.

In a poll published by Ipsos, 64 percent of people said they were fairly or very concerned about the prospect of rising interest rates – a figure that rose to 80 percent among those aged 18 to 34.

Some 67 percent said they were worried about the value of their savings, while concern about energy bills and the rising cost of living in general reached 75 percent and 89 percent respectively.

Gideon Skinner, head of political research at Ipsos in the UK, said: “We know that concern about the cost of living and inflation is at the top of the public’s agenda, with the proportion saying it is an important issue facing the country at a 40-year high in Ipsos’ long-term trends.

"And this particularly manifests itself in concerns about energy and utility bills and in the value of people’s savings.

“But with the Bank of England stating they need to put up interest rates to help bring inflation down, there is concern about the impact of higher interest rates too – which suggests exploring additional solutions to help people who are facing financial difficulties will be high on the public’s wish-list for the new prime minister’s government.”

Interest rates have already increased from 0.1 percent in December to 1.25 percent in June as the Bank of England attempted to keep a lid on inflation.

They are now expected to increase even further to 1.75 percent.

The Ipsos survey, which asked 1,750 British adults about their economic concerns on Tuesday and Wednesday, also found a quarter had been forced to dip into their savings in the last six months.

Nearly one in five had seen their household income decrease.

Some 14 percent said they had increased the amount they had outstanding on their credit card while 10 percent said they had fallen behind in paying the bills.

The poll also found levels of economic concern were higher among younger people.

While 45 percent of the public in general said they were concerned about paying the rent or mortgage repayments, that figure was 59 percent among those aged 18 to 44 but only 22 percent among those aged between 55 and 75.

Similarly, 58 percent of 18-44s said they had faced some form of financial difficulty in the last six months, compared to 38 percent of 55-75s.

Mr Skinner said: “This research also shows that while concerns about the cost of living, bills and savings are shared across all age groups, worries about housing costs (and rising house prices) are particularly acute among younger people, who are already more likely to say they have experienced a range of financial difficulties since the start of the year.”

The Bank of England
The Bank of England
Yui Mok

Governor of the Bank of England Andrew Bailey
Governor of the Bank of England Andrew Bailey
House of Commons

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