Date of Bank of England's next interest rates announcement and why they could rise to 5.5%

The Bank of England will meet next month to decide what to do with interest rates for the sixth time this year.

With inflation still at a high – although falling – rate, it is likely that rate-setters will decide to increase the cost of borrowing again, in an effort to contain the impact of price rises.

The Bank has now upped rates 14 consecutive times since the end of 2021. 

Here’s what you need to know.

When is the next interest rates decision?

The Bank of England’s Monetary Policy Committee (MPC) votes eight times a year, roughly every six weeks, to determine policy on interest rates.

Before the MPC’s nine members decide what action to take, they hold several meetings to review how the economy is working. 

At a final meeting, the Governor of the Bank – currently Andrew Bailey – recommends the policy he believes will be supported by the majority of MPC members, and the members vote.

The next interest rates decision is due on Thursday 21 September, with two more scheduled this year on 2 November and 14 December.

Why the rate could rise to 5.5%

A group of leading experts told i that the Bank of England should increase interest rates again to at least 5.5 per cent next month – even though inflation is falling.

Data released last week shows that the headline Consumer Prices Index (CPI) rate of inflation fell to 6.8 per cent in the year to July, compared to 7.9 per cent in June.

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Despite this, five of i‘s panel of nine experts, including several ex-Bank of England economists, have said that the base rate should still increase from 5.25 per cent to 5.5 per cent in September, while the other four believe the central bank should go further and raise it by 0.5 percentage points.

Several of them acknowledged that constant increases are “hurting the economy” but that the balance the Bank has to strike is “difficult”.

Increases to the base rate curb borrowing and spending, which can curtail economic growth.

However core inflation, which does not include more volatile price increases such as those to food and energy, did not come down between June and July.

This may be evidence of how embedded price rises have become.

Another increase will, once again, inflict immediate pain on homeowners with mortgages that are linked to the base rate.

If it works as intended, an increase can lower the rate of price increases, but a side effect is that it slows down economic growth, which risks a recession.