Borrowing costs are set to ease today with the Bank of England expected to cut interest rates despite lingering fears over resurgent inflation.
Economists widely believe the Bank’s monetary policy committee (MPC) will announce the base rate will be reduced by 0.25 percentage points to 4 per cent at 12pm.
It would be the fifth decrease in borrowing costs since the base rate peaked at 5.25 per cent in August last year and help further relieve pressure for some mortgage holders and home buyers.
But the move comes amid fears over the state of the UK economy with inflation reaching an 18-month high in June by climbing to 3.6 per cent, while unemployment rose to 4.7 per cent, its highest level in four years, in May.
It follows a 0.1 per cent GDP contraction in May, following a 0.3 per cent drop the previous month, and signs of growing pressure on the jobs market.
Bank of England Governor Andrew Bailey said earlier this month that the Bank would be prepared to cut rates if the jobs market showed signs of weakening.
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