What to expect from UK interest rates after inflation fall 

Investors are divided over whether UK interest rates will be increased again on Thursday after figures show a shock price rise deceleration.

A 15th rise in a row to 5.5% from 5.25% was widely expected, but now just half of investors anticipate a promotion.

Anticipations changed after inflation, which is the rate of price climb, was shown to have slipped suddenly to 6.7% in the year to August.

The Bank of England sets UK interest rates and will announce its decision by midday. Any uprise would mean higher interest rates on several mortgages and loans and higher savings rates.

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The Bank has been increasing rates since December 2021 to tackle inflation in the UK, which is much higher than normal and putting households under economic pressure.

By making it more costly for people to borrow money, it expects households will cut back and buy fewer items. It might even mean that companies will raise prices more slowly.

But it’s a slippery balancing act. Raising rates too aggressively could force people to cut back on household spending, which could see companies struggle for survival and slow financial growth.

The US central bank, the Federal Reserve, held rates constant on Wednesday at 5.25%-5.5% as it, too, figures out whether enough has been done to fight inflation.