Bank of England governor hints at November rate rise

·1 min read

Andrew Bailey has given his clearest hint yet that the Bank of England is about to raise interest rates in an attempt to combat a jump in inflation.

The BoE Governor suggested yesterday that Threadneedle Street is preparing to lift rates from their current all-time low of 0.1pc, with speculation it could act as soon as next month.

It comes as officials race to dampen down inflation, which is currently running at 3pc and is expected to climb further over the winter months as energy prices spike and supply chains buckle under the weight of chronic shortages.

Speaking in an online panel, Mr ­Bailey said: “Monetary policy cannot solve supply-side problems – but it will have to act and must do so if we see a risk, particularly to medium-term inflation and to medium-term inflation expectations.

“And that’s why we at the Bank of England have signalled, and this is another such signal, that we will have to act. But of course, that action comes in our monetary policy meetings.”

The Bank’s Monetary Policy Committee will next announce a decision about rates on Nov 4.

Markets believe a rate increase to 0.25pc is increasingly likely after concerns were raised by several policymakers about inflation in the past few weeks. Such a move would lead to an immediate increase in costs for nearly 2m households with variable mortgages.

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