The Bank of England is expected to come under pressure again to cut interest rates when it announces its latest decision on Thursday.

Mortgage costs continue to climb as the Bank’s Monetary Policy Committee has stuck to its policy of waiting for inflation to fall.

Santander, Natwest and Nationwide have all raised rates in the last week.

Lowest level

The Bank held the base interest rate at 5.25% in March, with an almost unanimous vote even though Inflation fell to its lowest level in more than two years at 3.4%, and later 3.2%.

Governor Andrew Bailey (main picture) said it was “not yet” the time to cut interest rates, despite “further encouraging signs” that inflation is coming down.

The Bank has to be sure that inflation will reach the Government’s 2% target and “stay there”, he said.

Mortgage rates up

Latest tracker data from Rightmove shows mortgage rates going up, with the average 5-year fixed rate at 4.97% and two-year at 5.38%.

Matt Smith, Rightmove’s Head of Product (Mortgages), says: “The Bank of England meeting will be quite key for setting the tone for mortgage rates leading into summer.

There is still a lot of uncertainty around when we might see the first interest rate cut.”

“An uneasy few weeks for the world economy has meant that there is still a lot of uncertainty around when we might see the first interest rate cut – and both have contributed to an uptick in average mortgage rates,” he says.

“Despite the rises, it doesn’t appear that we’re seeing the same kind of spike in rates as we did at this time last year.”

Headlines from Rightmove’s mortgage tracker:

–    The average 5-year fixed mortgage is now 4.97%, up from 4.48% a year ago

–    The average 2-year fixed mortgage is now 5.38%, up from 4.78%

–    The average 85% LTV 5-year fixed mortgage rate is now 4.90%, up from 4.44%

–    The average 60% LTV 5-year fixed mortgage rate is now 4.50%, up from 4.17%