MercoPress. South Atlantic News Agency

With prices continuing to rise, Bank of England expected to increase the basic rate to 4,25%

The Bank of England rate is already at its highest level for 14 years, rising consistently in response to the soaring cost of living.

Following a surprise rise in UK consumer prices, the Bank of England is expected to increase interest rates for an 11th consecutive. Analysts think an increase in the Bank rate from 4% to 4.25% is the most likely outcome of the Monetary Policy Committee Thursday meeting later.

Policymakers face a balancing act between controlling inflation and ensuring financial stability. A change would have an immediate impact on some borrowers and savers.

The cost of a variable or tracker mortgages would go up, as could the interest on other loans, but the rate of return for savers may improve.

The Bank rate is already at its highest level for 14 years, rising consistently in response to the soaring cost of living.

An unexpected increase in the rate of inflation - which charts rising prices - was revealed on Wednesday. The rate went up to 10.4% in the year to February, compared with 10.1% in January.

That makes an interest rate rise more likely, despite analysts having previously been more circumspect about the chances of an increase. Turmoil in the banking system led to greater uncertainty about the global economic outlook - a picture that may have pulled policymakers towards a tactic of pausing, or cancelling any further rate rises.

The Bank of England may also look across to the US, where policymakers at the Federal Reserve raised interest rates on Wednesday. .

The increase came despite fears that the move could add to financial turmoil after two bank failures in the US.