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The Bank of England is expected to hold interest rates at a meeting later today.<\/p>\n
Most analysts predict the benchmark rate will stay at its current level of 4.75% when the decision is announced at 12:00 GMT.<\/p>\n
It comes as inflation rose for the second month in a row<\/a> to 2.6% in the year to November – pushing it further above the Bank’s target of 2%.<\/p>\n In November, the Bank’s governor Andrew Bailey said the path for rates would likely be “downward from here” but cautioned that the process would be gradual.<\/p>\n<\/div>\n The Bank moves rates up and down to try to control inflation, which measures the pace of overall price rises.<\/a><\/p>\n The idea is that if you make borrowing more expensive, people have less money to spend. People may also be encouraged to save more.<\/p>\n In turn, this reduces demand for goods and slows the rate at which prices are rising.<\/p>\n But it is a balancing act – increasing borrowing costs risks harming the economy.<\/p>\n Businesses, for example, may borrow less, making them less likely to create jobs. Some may cut staff and reduce investment.<\/p>\n