The Bank of England (BoE) is expected to announce a new change to interest rates which will directly affect Brits' finances.
Last March, when the BoE announced its previous review of the base rate, it decided to raise the Base Rate from 4 per cent to 4.25 per cent. This decision drove the UK's interest rate to its highest point since the early stages of the 2005 financial crisis.
It is not yet clear what the BoE will decide when it concludes its meeting on May 10, however many have predicted that if there is an increase, then it will be the last before it begins dropping again. Michael Saunders, a previous member of the monetary policy committee, told the BBC that interest rates were at a "turning point".
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He said that a hike in May will be the last, followed by a period of "fairly stable" interest rates. However, the Bank of England's chief economist, Huw Pill, recently highlighted that the UK is in a fragile market state.
In a speech to the Graduate Institute in Geneva, he said: "On balance, the onus remains on ensuring enough monetary tightening is delivered to see the job through and sustainably return inflation to [the 2 per cent] target." He added that the Monetary Policy Committee was keeping a close eye on the nation's financial situation and how it affects their inflation forecasts.
He also stressed that he was looking at the risk of high inflation becoming a normal trend in the UK as companies continue to raise prices while workers demand higher pay. In a separate speech, independent MPC member Silvana Tenreyo predicted that the current high bank rate "will require an earlier and faster reversal, to avoid a significant inflation undershoot."
If interest rates do rise again in May, it means that those who pay money back on loans or mortgages with a variable interest rate will see the cost of their repayments go up. However, those who pay these back at a fixed rate will be unaffected until the end of their fixed period.
If you're worried about how a higher interest rate will affect your mortgage payments, you can use a mortgage calculator to better prepare yourself.
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