Interest rates could hit 4.75% this year
Further increases in UK interest rates this year look almost inevitable. The only question is how far policymakers will go, as pressure grows on the Bank of England to do more to get to grips with the rise in the cost of living.
More than 1.6 million households on tracker and standard variable rate mortgages saw an immediate increase in their monthly mortgage payments after a decision by the Bank of England to increase its base rate by 0.5% to 3.5% in December.
The money markets are pricing in further hikes this year, with Neville Burdock, the head of Sportsbook at Sporting Index, among the analysts predicting that a 4.75% base rate is likely to be in the UK’s near-term future.
He explained that although the Bank of England was split in its decision to raise interest rates to 3.5%, his firm expects rates to rise further this year in an effort to curb inflation, and their prediction has them reaching a high of 4.75%.
“Despite a small dip in the rate of inflation in November, we don’t think we’ve seen the short-term peak and expect inflation to reach 12 percent in the new year, which would eclipse anything we’ve seen in 2022,” he said.
The next Bank of England announcement regarding interest rates will be made on Thursday 2nd February 2023.