UK Interest Rates and Mortgages: Impending Changes and Risks

The Bank of England is expected to raise interest rates to 4.75% from 4.5% on Thursday, with investors split on whether the hike will be bigger. Inflation has overshot the Bank's forecasts, holding at 8.7% in May, and there are fears about the impact on mortgage-holders and the risk of a recession. The UK economy has been hit by Brexit, the COVID-19 pandemic, and the surge in gas prices caused by Russia's invasion of Ukraine. The Bank's forecasts predict growth of just 0.25% this year, and output has barely recovered to pre-pandemic levels.