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When is the next interest rates announcement and will they increase?

The Bank of England  (John Walton / PA)
The Bank of England (John Walton / PA)

The Bank of England has kept interest rates at 5.25 per cent as it forecast that inflation is set to fall to its target level a year-and-a-half earlier than expected.

The Bank’s Governor, Andrew Bailey, said there had been “good news” on inflation in recent months but that the committee needs to see more evidence that inflation will fall “all the way to the two per cent target, and stay there” before it can reduce interest rates.

At the last review, interest rates were held steady, much to the relief of many mortgage owners.

The UK central bank began raising interest rates as the pandemic came to an end and energy costs began to rise. The Monetary Policy Committee of the bank, which sets interest rates, increased rates 14 times between December 2021 and August 2023, sending them skyrocketing from an all-time low of 0.1 per cent to their current high of 5.25 per cent.

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Martin Beck, chief economic advisor to the EY Item Club, said little has changed since the previous rate decision to bring about a different result.

In December, he said: “There’s been nothing in the way of significant economic surprises over the last four weeks and inflation and pay growth have slowed (the former by more than the Bank of England expected).”

Brits have been battered with interest rates hiked over previous years, and now no longer have confidence that things will get better any time soon, according to a study.

A recent Bank of England survey revealed the public believes that inflation will still be too high in late 2028.

The Bank of England/Ipsos Inflation Attitudes Survey suggests that the public doubts the Bank’s ability to bring inflation down to the two per cent target. When asked what they expect the rate of inflation to be a year from now, respondents gave a median answer of 3.3 per cent. For three years from now, they said 2.8 per cent. In five years, they said it would be 3.2 per cent.

Have interest rates increased?

The Bank of England met on February 1 to decide what level the interest rate should be set at. They have confirmed it will be set at 5.25 per cent. The Monetary Policy Committee, inside the Bank of England, determines the base rate.

The committee reveals its decisions about interest rates every six weeks, alongside factors that have led to the verdict.

You can find out more about why interest rates rise in our guide.

When is the next interest rates announcement?

The MPC meets eight times a year to discuss whether it should raise or cut interest rates, or keep them the same.

The last meeting took place on February 1, when it decided to maintain interest rates at 5.25 per cent.

The next interest rate meeting will take place on March 21, 2024.