‘Nailed on’: Bank of England expected to hike interest rates

The Bank of England is expected to hike interest rates next week as policymakers battle to stamp on inflationary pressures building in the UK economy. City analysts have predicted that the Bank’s Monetary Policy Committee will vote to raise interest rates from 3.75 per cent to four per cent. The Bank has been closely monitoring evidence for “second round effects”, where higher inflation could force workers to demand larger pay packets, with extra costs on firms thereby pushing inflation higher in a spiralling effect. Deutsche Bank is among a number of financial firms which has said the MPC will be split 6-3 in favour of tightening monetary policy due to growing concerns of these economic forces over the upcoming months. Sanjay Raja, its chief UK economist, said governor Andrew Bailey would back a hike in interest rates as rising energy prices and stronger growth could prompt rate-setters to take “pre-emptive” action to prevent a higher spike in inflation over the ne