Bank of England forecast to raise interest rates to 3%

The central bank’s Monetary Policy Committee (MPC) is due to meet on Thursday, November 3, which is next week. During that meeting, the Bank of England’s group will be discussing whether or not to raise the UK’s base rate to combat inflation. Scottish independence would be a huge financial success – for England One of the consequences of this will be that interest rates will go up which will be ‘expensive for mortgage borrowers’, according to analysts.As it stands, the nation’s Consumer Price Index (CPI) rate of inflation is at 10.1 percent and is likely to remain high for the foreseeable future.Over the last couple of months, the Bank of England has raised the base rate which is now at 2.25 percent.Following the political and economic turmoil that arose from former Prime Minister Liz Truss’ short lived premiership, another hike to interest rates is expected next week.READ MORE: 70 health conditions qualify for extra £156 a week in PIP from DWP Bank of England forecast to raise interest rates to 3% (Image: GETTY)Some experts believe an increase to three percent is on the table as the ongoing cost of living crisis places unprecedented pressure on households.While this will result in savers getting a boost to their returns, those with mortgages and debt payments will likely have to pay more.Concerns have been raised about whether the continuous rise in interest rates will do more harm than good and are just attempts to avoid the nation’s eventual predicted recession.Laith Khalaf, the head of investment analysis at AJ Bell, shared the current forecast for interest rates.DON’T MISSState pension sum may be less if you were ‘contracted out’ – check now [WARNING]What the falling pound will mean for YOUR finances [ALERT]Single mum on Universal Credit shares her top tips for saving money [INSIGHT]450,000 people may be placed on energy prepayment meters [ALERT]Mr Khalaf explained: ‘In terms of the immediate policy decision, the market is now pricing in a 0.75 percent interest rate rise at the next meeting.’The delay to the new chancellor’s fiscal statement will probably encourage the Bank’s rate-setters to be cautious with their November interest rate hike, because they’ll still be missing a big part of the economic picture.’The Bank can always then adjust monetary policy at the December meeting if needed, when the full scope of the Government’s fiscal plans will be laid bare by the Autumn Statement.’Originally, the Government’s fiscal update was due to take place prior to the Bank of England’s announcement on October 31, 2022.READ MORE: Paramedic shares how she dishes up tasty meals costing 68p per portion How have interest rates risen? (Image: EXPRESS.CO.UK)The finance expert added: ‘Looking further out, the trajectory for UK interest rates is quite breath-taking.’Especially when you consider that at the beginning of last year the Bank of England was warning about the possibility of negative interest rates.’Last November, the base rate still stood at 0.1 percent, and the central bank was predicting inflation would peak at five percent in April of this year.’Now markets are pricing in base rate hitting five percent in 2023, and CPI inflation sits at a distinctly uncomfortable 10.1 percent.’