On Thursday, the Bank of England is expected to announce the biggest interest rates since the 1980s in an attempt to control inflation.
The Monetary Policy Committee, which decides the official interest rate in Britain, are to meet and make a decision which could see a rise in mortgage rates at a time British households are facing the cost of living crisis.
The Committee may be planning to push the current 2.25 percent interest rate to 3 percent, which would be the highest since the financial crisis of 2008. If the interest rate rises by 0.75 percent, it would see the biggest single increase since 1989.
In October, markets predicted the interest rate could rise as much as one percent but this seems to have changed since Liz Truss stepped down as Prime Minister.
Deutsche Bank analysts have predicted the Bank of England will decide on a 0.75 percent rise with a split vote of the committee.
The experts added: “Conditioned on market pricing, the UK economy will likely fall into a deeper and more prolonged recession.”
The committee meeting comes at a time house prices fell by 0.9 percent last month, according to data from the Nationwide Building Society.
The average price of a British home has fallen to an average of £268,282, and the annual growth in house prices decreased from 9.5 percent to 7.2 percent.
The building society predicted that housing prices would continue to fall in the upcoming months as interest rates continue to rise.
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Source: Bank of England predicted to announce biggest interest rise in 33 years