London Daily

Focus on the big picture.
Friday, Aug 28, 2026

Monetary Policy Committee Expected to Raise Interest Rates Amidst Increasing Inflation

Monetary Policy Committee Expected to Raise Interest Rates Amidst Increasing Inflation

The Bank of England's Monetary Policy Committee (MPC) is expected to raise interest rates by 25 basis points to 4.75% at their next meeting on June 22, following a rise to 4.50% in March, due to inflation falling to 8.7% in April, which is still above the MPC's 2% target.
However, inflation rose in the core categories, from 6.2% in March to 6.8% in April, which suggests that the MPC has little option but to continue its tightening cycle.

Economists warn that there is a high probability of another hike in early August.

The cost of living is becoming increasingly difficult for low-income families, with food inflation rising at an eye-watering rate of 19.1% in April, down only slightly from 19.2% in March.

The IMF has warned that interest rates in Britain will likely have to rise further and remain high for longer to get a firm grip on inflation.

The Chancellor of the Exchequer, Jeremy Hunt, welcomed the "big upgrade" to the UK's growth forecast, which he said "credits our action to restore stability and tame inflation." However, the economic pain faced by millions of families was laid bare by food inflation remaining eye-wateringly high.

The UK saw a significant increase in grocery spending during the week of the coronation, with sales of wine and quiche soaring.

However, the country's overall food price inflation was the second highest among the G7 group of wealthy nations.

The Chancellor met with food manufacturers to discuss ways to support consumers amid rising food prices, while the Government's borrowing soared to a near-record level due to higher debt interest and energy support schemes.

Central government receipts decreased while spending increased, with a rise in social benefits and cost-of-living financial support.

The private sector's growth slowed in May, falling short of expectations according to a flash UK purchasing managers' index.
Newsletter

Related Articles

0:00
0:00
Close
Nearly 23,000 UK Households Expected to Move Home on Busiest Day of 2026
UK Benefit Payments to Arrive Early Ahead of August Bank Holiday
Reform UK Pledges to Replace GDPR and Cut Tax Administration Red Tape
Andy Burnham Launches Work Experience Plan for One Million Young People Outside Education or Work
Andy Burnham Faces Labour Backlash After Dropping Support for Political Donations Cap
Andy Burnham Announces UK-Wide Summit With Leaders of Scotland, Wales and Northern Ireland
Met Office Warns of Heavy Rain and Flood Risk Across England and Wales After Summer Heat
Bank of England Warns AI Adoption Could Reduce Demand for Automatable Jobs
UK Confirms National Salmonella Outbreak With More Than 200 Cases
UK Airports Handle Record 81 Million Passengers Despite Middle East Disruption
Ofgem Raises UK Energy Price Cap by Four Percent to £1,723
Cyber Attack Hits Customer Data Systems at Manchester, Stansted and East Midlands Airports
TSA Unveils Major Airport-Security Overhaul as It Drops Gold+ Privatization Plan
CIA Chief Warned Russia Against Attacking NATO in Secret Moscow Mission
Raheem Sterling Charged With Dangerous Driving After Lamborghini Crash
The Secret Dolly Parton Kept Until Her Death: "She Was Much Sicker Than She Let On"
Middlesbrough House Fire Kills Woman and Seven-Year-Old Girl
Prince Harry and Meghan Markle Return to UK Amid Renewed Media Attention
Raheem Sterling Charged With Dangerous Driving After London Collision
Greenpeace Threatens Legal Action Over Crown Estate Offshore Wind Leasing
Nvidia Revenue Surges to Ninety-Six Point Two Billion Dollars on Artificial Intelligence Demand
Meta Agrees to Global Youth Safety Changes Following Multi-State Legal Settlement
UK Government Plans Autumn Summit With Scottish, Welsh and Northern Irish Leaders
CMA Caps Veterinary Prescription Fees at Twenty-One Pounds
Thames Water Pilot Records Forever Chemicals at Thirteen Times the Legal Limit
Kent Meningitis Outbreak Reaches Thirty-Four Confirmed Cases
Forty Children Missing From UK Asylum Accommodation Remain Unaccounted For
UK Court Upholds VAT on Private School Fees
US Designates Palestine Action as Foreign Terrorist Organization
UK Approves Massive New Chinese Embassy Complex in London Amid Security Concerns
Prime Minister Andy Burnham Visits Kyiv and Offers Cruise Missile Designs to Ukraine
Glacier Collapse, Not Earthquake, Triggered Deadly Nepal-Tibet Flood
Andy Burnham Drops Plan to Cap Political Donations
Conservative Leadership Contest Intensifies as Robert Jenrick Attacks Kemi Badenoch
French-Born Defence Secretary Wes Streeting Condemns Homophobic Abuse Since Taking Office
UK Government Delays Commercial Robotaxi Rollout in London Over Regulatory Gaps
NHS Complaints About Autism and ADHD Care Waiting Times Triple Over Five Years
UK Government Launches 10,000 Work Placements for Young People With Sainsbury's
NHS England to Offer Free At-Home Cervical Cancer Screening Kits
EU Biometric Border Checks Cause Delays of Up to Five Hours for British Travellers
US Imposes Economic Sanctions on UK-Based Protest Group Palestine Action
Two Planned UK Datacentres Could Produce More Annual Carbon Emissions Than ExxonMobil's Entire UK Operation
London Surgeons Complete First Artificial Intelligence-Assisted Brain Tumour Removal
UK Services Growth Rebounds as Consumer Confidence Reaches Two-Year High
Ofgem Confirms Four Percent October Energy Price Cap Increase for UK Households
Government Considers Insolvency Law Changes to Bring Thames Water Into Public Ownership
Andy Burnham Signs Artificial Intelligence Defence Pact During Visit to Kyiv
Church of England Faces Renewed Scrutiny Over Historical Safeguarding Failures
Reform UK Proposes £30 Tax Credit for Long HMRC Telephone Queues
Greater Manchester Secures More Than £100 Million to Upgrade Victorian Railway Stations
×