A rapid interest rate rise seems inevitable – and households are expected to pick up the tab
Summary
The Bank of England forecasts that inflation will reach 5% next spring, above its 2% target, and economists expect further interest rate rises. Higher rates could increase mortgage and business borrowing costs, while higher prices for goods and services could also affect households and public bodies.Key Facts
- The Bank of England’s latest forecasts put inflation at 5% next spring.
- The Bank of England has an inflation target of 2%.
- The Bank’s chief economist, Huw Pill, said more than one interest rate rise was almost certain.
- The Bank’s interest rate was 4%, and a rise to 4.25% was discussed as a possibility.
- Government spending on goods and services accounts for 25% of total consumption in the UK economy.
- The lower Thames crossing project, linking Essex and Kent with two tunnels, is estimated to cost £11 billion, more than twice its earlier cost.
- The lower Thames crossing is planned to cover 14.5 miles (23 km).
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