Pound dips as markets brace for financial institution of britain hobby price decision – business live

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

Central banks are in the spotlight today as the Bank of England and the European Central Bank both set interest rates.

Both banks are trying to fight double-digit inflation (sharply over their targets of 2%) and both are expected to raise borrowing costs by half a percentage point.

That would take UK interest rates up to 3.5%, the highest level since October 2008, up from 3% at present, despite fears the UK is falling into recession.

A 50 basis-point hike is punchy by historic standards, but would actually be a slowdown after the Bank of England lifted borrowing costs by three quarters of a percent last month to 3%, its biggest rise in three decades.