The Bank of England (BoE) is expected to increase its base rate from 0.75% to 1% this week, the Financial Times has reported.

This would take interest rates to their highest level since 2009, as the BoE’s Monetary Policy Committee (MPC) seeks to tackle record levels of inflation.

The anticipated 0.25 percentage point increase would follow successive rate rises of the same amount, after the MPC increased rates to 0.5% at its meeting in February, and to 0.75% at its last meeting in March.

Last month, the Office for National Statistics (ONS) reported that its Consumer Prices Index (CPI) increased from 6.2% in February to 7% in March – the highest rate of inflation in 30 years.

The BoE has also projected that inflation is expected to increase further in the coming months, to around 8% in 2022 Q2, and “perhaps even higher later this year”, it stated in its last MPC summary.

“If sustained, the latest rise in energy futures prices means that Ofgem’s utility price caps could again be substantially higher when they are reset in October 2022,” the Bank stated in March. “This could temporarily push CPI inflation around the end of this year above the level projected for April, which was previously expected to be the peak.”

The BoE will publish the minutes of tomorrow’s MPC meeting on Thursday.

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