// BBC BUSINESS NEWS — FINANZA
What's happening to UK interest rates and what does it mean for mortgages?
Policymakers at the Bank of England are expected to raise UK interest rates for the first time in more than three years at their next meeting.
Most analysts believe the Bank rate will go up from 3.75% to 4%, following holds at the previous six meetings.
Before the US and Israel launched strikes against Iran in February, rates had been expected to fall this year, but the economic fallout from the conflict has pushed up inflation across the globe.
Interest rates affect mortgage, credit card and savings rates for millions of people.
An interest rate tells you how much it costs to borrow money, or the reward for saving it.
The Bank of England's base rate is what it charges other banks and building societies to borrow money, which influences what they charge their own customers for mortgages as well as the interest rate they pay on savings.
The Bank moves its base rate up and down in order to keep UK inflation — the rate at which prices are increasing — at or near 2%.
When inflation is above that target, the Bank typically puts rates up.
The idea is to encourage people to spend less, reducing demand for goods and services and limiting price rises.
The Bank of England's base rate rose to 5.25% in August 2023. It remained at that level until August 2024, when the Bank started cutting.