UK interest rates – what’s next and are they high enough to cool inflation?

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How long do interest rate changes take to work and why aren’t they working yet? Here’s a deep dive into what’s happened so far and where UK interest rates could go next in 2023.

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30 June 2023

The Bank of England’s (BoE) 50 basis point hike in interest rates in June shocked financial markets. Not only did interest rates rise to their highest level since 2008, but back in early May, the Governor of the BoE, Andrew Bailey, said that we could be near the peak for interest rates.

As we move towards the second half of the year, UK inflation is still higher than the Eurozone and the US, and our borrowing and mortgage rates are surging. This comes even though the BoE has hiked interest rates 13 times and was the first of the major central banks to start tightening rates back in December 2021.

So, why aren’t higher rates working to tame inflation?

This article isn’t personal advice. If you’re not sure