Bank of England set to overshadow Healey’s Budget with interest rate hike
The Bank of England is expected to overshadow John Healey’s maiden Budget with a “done deal” interest rate hike aimed at taming soaring inflation, but this threatens to limit economic growth. Top City economists predict the central bank’s Monetary Policy Committee (MPC) will raise the base rate at its November meeting, just one week after [...]
The Bank of England is set to make its move on inflation before John Healey unveils his first Budget, with an interest rate hike expected at the November Monetary Policy Committee meeting. This move aims to curb the soaring inflation rates, but may hinder economic growth. City economists predict the rate will be increased, following a sharp rise in fuel prices due to the ongoing US-Iran conflict, which has led to a surge in oil prices.
The Bank has not altered rates since December 2025, but with inflation likely to exceed four percent in the new year, it appears "almost guaranteed" that a rate hike will take place. While some economists see limited evidence of inflationary pressures beyond fuel costs, the Bank's decision is expected to take place regardless. Chancellor John Healey will face the challenge of managing economic growth in the face of the interest rate hike, which could further restrict growth and increase household bills and state benefit costs.
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