How high will the Bank of England have to put base rates ?

Question

Reuters is suggesting 6% in the near term.

Answer 1

6% sounds like a reasonable estimate for the short term. The Bank of England operates under an inflation target, meaning it tries to keep inflation in a certain range, and this dictates how it conducts monetary policy. Given the current state of how inflation is moving, a rise to 6% is probably about right.

This increase seems high, but it should be noted that the past few years have seen interest rates at abnormally low levels. This is merely a return to more normal interest rates. In the 70's and 80's, the rate rose to as high as 18%, so we are actually quite low in comparison.