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The Bank of England is expected to raise interest rates by 0.25% TODAY

Britons today face more cost of living concerns as the Bank of England prepares to raise interest rates for the fifth consecutive month.

The Monetary Policy Committee is expected to raise the base rate by 0.25 percentage points to another 13-year high of 1.25% as it strives to contain runaway inflation.

But mortgage lenders are likely to be spared an even bigger increase – which many analysts had anticipated could be 0.5 percentage points – after dismal figures this week showed the UK economy is already shrinking. reverse.

The midday decision comes after the US Federal Reserve imposed a mouth-watering 0.75 percentage point hike – the biggest in decades – as it grapples with the same issues.

If the Bank of England rate reaches 1.25% as expected, it will be the first time since January 2009 that it has been above 1%.

Meanwhile, former Governor Lord King has urged Boris Johnson to get to the level of the public about the ‘inevitable’ hit to living standards.

He said the crisis would ‘remind you of the 1970s’ and suggested the prime minister needed to be honest about what was happening.

“Our leaders must give us a clear narrative of why recent events will inevitably lower our national standard of living, how this burden will be shared, why reducing inflation is important, and why measures to increase economic growth and reduce Regional disparities will take many years to materialize, but will only work if we start now,” he wrote in The Spectator.

Bank of England Governor Andrew Bailey is expected to announce the interest rate decision at midday today

If the Bank of England rate reaches 1.25% as expected, it will be the first time since January 2009 that it has been above 1%

If the Bank of England rate reaches 1.25% as expected, it will be the first time since January 2009 that it has been above 1%

The nine-person MPC includes Governor Andrew Bailey, two deputy governors – Sir Jon Cunliffe and Ben Broadbent – and chief economist Huw Pill.

While headline CPI inflation is expected to reach double digits by the end of the year, the MPC has voted for a hike at each of the past four meetings, in December, February, March and May.

However, it has been criticized for not reacting quickly enough to rising prices and an overheated labor market.

Last time, three of the nine members of the Monetary Policy Committee already voted to set rates at 1.25%.

However, some things have changed since then. Britain’s economy appears to be struggling, with an OECD forecast predicting it will be the weakest in the Group of Seven (G7) next year.

The Bank has been given a bit more leeway by the Chancellor, who is expected to funnel billions to struggling households to help them cope with rising energy bills.

A rise in interest rates will eat away at some of this handout, as the cost of borrowing will rise for homeowners.

But savers will benefit from a hike.

“April’s GDP data…will surely mean the inner bloc – Bailey, Broadbent and Pill – sticks to voting to raise the Bank Rate by 0.25% this month,” said Samuel Tombs , UK chief economist at Pantheon Macroeconomics.

“And given that some members last month thought guidance for further interest rate hikes was outdated, we expect to see at least one of them, most likely Cunliffe, vote for no change.

“With markets currently pricing in a 34bp hike in the Bank Rate this week and a further 41bp hike for the August meeting, we expect rate expectations and the pound to fall to the follow-up to this week’s meeting.”

Laith Khalaf, head of investment analysis at AJ Bell, said: “The Bank of England faces a severe test of its mettle in the next interest rate decision, and any hesitation is likely to result in a punishment of the pound on the foreign exchange markets.”

Such a drop would mean that the price of petrol and diesel, and other imports that the UK pays in dollars, would rise.

This month the average deposit price for a family car topped £100 for the first time.

“By raising interest rates, the Bank is putting the brakes on an economy that is already slowing on its own,” Mr. Khalaf said.

“It risks stagnating the economy, or worse, backtracking.”

GDP fell for the second consecutive month in April after falling 0.1% in March, underscoring the threat of

GDP fell for the second straight month in April after falling 0.1% in March, underscoring the threat of ‘stagflation’ as inflation soars