Bank of England policymakers will announce the result of their November meeting on Thursday, when most analysts think they will trim the base rate by a quarter-point to 4.75 per cent
The Bank of England is expected to cut interest rates next week - despite predictions that Labour’s Budget could lead to higher inflation over the coming year.
Last month, official figures showed the headline rate of inflation dipped to 1.7%, its lowest level since April 2021, while services sector inflation also fell, boosting hopes that rate-setters will vote to cut.The base rate, which helps to dictate mortgage rates and borrowing costs, currently sits at 5%, after it was hiked in recent years to bring inflation down to the Bank’s 2% target.
The Monetary Policy Committee meets in the week after Chancellor Rachel Reeves announced almost £70 billion of extra annual spending, funded by business-focused tax hikes and additional borrowing. The Office for Budget Responsibility said the sharp increase in spending will contribute to higher inflation, although it will also help drive stronger economic growth.
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