Bank of England warns of another rates hike

Borrowers in the UK look set to face another rise in interest rates if inflation is to hit the British government’s 2% target, the Bank of England suggested today.

A key quarterly inflation report from the Bank indicated that interest rates may need to rise by another quarter point to 5.75% for inflation to be kept under control.

The Bank predicted that the Consumer Prices Index (CPI) – the official measure of inflation – would narrowly miss the 2% target if rates were kept at 5.5%.

The forecast will be bad news for homeowners in the UK who have already seen four interest rate rises since last August, hit by another quarter point rise earlier this month.