Rise in rate of interest ‘on its way’

The Bank of England yesterday left borrowers bracing themselves for a sooner-thanexpected rate hike.

Its Monetary Policy Committee voted five to three to freeze its base rate at a record low 0.25% for another month.

But the number of members who voted for a 0.25% rise was the highest since 2011.

The trio said a rise now was needed to keep a lid on inflation, which jumped to 2.9% last month.

An interest rate rise would be welcomed by millions of long-suffering savers.

But it risks pushing up repayment costs for mortgage borrowers and others.

Rebecca Piggott, from the National Institute of Economic and Social Research, said the vote “raises the probability of an interest rate rise in the near future and that would exert further pressure on household budgets”.

Paul Hollingsworth, of Capital Economics, reckons rates won’t rise until the middle of 2019.