UK interest rates set to fall at Bank of England meeting on Thursday - Experts are predicting a rate cut to 4.5% – but signs of rising inflation leave the Bank walking ‘a tightrope’ for future reductions this year.

The Bank typically hikes interest rates during periods of high inflation to discourage spending, thus slowing the rate of price increases. Currently, inflation stands at 2.5 per cent across the UK, slightly higher than the Bank's target of 2 per cent.

The base rate is currently at 4.75% after it was held at the previous Bank of England meeting in December 2024 - but is another cut in store for this Thursday?

Rate-setters are all but certain to announce a cut from 4.75% to 4.5% at the next Monetary Policy Committee meeting on Thursday.