The City has bet that the Bank of England is certain to implement back-to-back interest rate rises for the first time since 2004 as it contends with soaring prices.

Markets have priced in a 100% chance that the central bank will increase its base rate by 0.25% to 0.5% when its monetary policy committee meets on Thursday.

The Times reports that the Bank is faced with inflation at 5.4%, its highest level since 1992 and more than twice its target of 2%, as well as a booming labour market with unemployment close to historic lows at 4.1%.

The number of vacancies almost equals the number of unemployed people for the first time since comparable records began more than twenty years ago.

A rise would directly affect about 2.2 million mortgage borrowers who are on home loans linked to the base rate. Banks have tended to pass on past rate rises in full to these borrowers.

Millions of homeowners prefer fixed-rate deals rather than variable home loan rates. Savers, on the other hand, have endured historically low interest rates for years and would welcome a rise.

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