Interest rates could rise to 5.75 per cent in September due to high inflation, experts warn

The Bank of England is under pressure from some economists to limit the pace of interest rate rises

: “Headline as expected is down to 6.8 per cent and core is unchanged at 6.9 per cent. But the target is 2 per cent. This inflation surge is now more than two years old.

James Smith of the Resolution Foundation said: “Inflation has fallen rapidly over the past six months, but the UK still has the highest rate in the G7 and the Bank faces a daunting task in further taming price pressures. Accelerating pay growth will make even the Prime Minister’s promise to halve inflation hard to meet, let alone the Bank’s mandate of reducing it to 2 per cent.”

George Dibb of the IPPR think-tank said: “It’s good news that headline inflation is lower, especially with energy bills coming down, but there is a very real risk that a recession may soon overtake price rises as the main economic concern.”

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