The Bank of England's November Inflation Report, released today, shows the market-implied path for Bank Rate reaching 1% by 2020. Expectations for the path of Bank Rate have risen to 0.7% from 0.5% for Q4 2018 and to 0.9% from 0.7% by the end of 2019.
The Bank of England's monetary policy committee is due to meet this Thursday, November 2, with almost all experts now predicting that they will vote through a rise in the base rate of interest, for the first time in a decade. This would push the base rate back up to 0.5 per cent, where it had sat since March 2009, having been cut to 0.25 per cent last year in the wake of the Brexit vote. With 43 per cent of homeowners on variable or tracker mortgages, this opens up the possibility that millions of households will see their monthly expenditure increase in the run up to Christmas. Many of these homeowners will never have known rates to rise above the historic low of 0.5 per cent.