Today, all eyes will be on Bank of England policymakers and whether they will once again hike base rate. That comes after inflation data yesterday revealed CPI edged down to 6.7 per cent in August.

Among the companies reporting today are Next and JD Sports. Read the Thursday 21 September Business Live blog below.

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Hearings before Select Committees of MPs rarely raise the roof.

The titanic, televised struggle between the erstwhile ‘King of the High Street’ Sir Philip Green and the campaigning former MP Frank Field over the fallout from the 2016 collapse of BHS, however, was a formidable exception.

Both, in their own way, emerged as victors. Green, by deploying quick wit, repartee and entrepreneurial know-how, was able to show he had been let down by the good and the great.

At the opening

The FTSE 100 index opened at 7731.65.

Inflation was revealed to have dipped again yesterday to 6.7 per cent – a figure that just two years ago would have been seen as horrifyingly high but is now seen as something to be pleased about.

Despite the CPI reading still being a chunky number, it’s an important step on the road back to the ‘old normal’ – where both interest rates and wage rises are higher than inflation.

This is Money readers will not need reminding that falling inflation doesn’t mean life is getting cheaper, just that it’s getting more expensive at a slightly slower rate, says Simon Lambert.

The pound tumbled to a ten-month low and shares rallied as a surprise fall in inflation raised hopes that interest rates may have already peaked.

In a report that caught the City off guard, the Office for National Statistics said inflation dipped from 6.8 per cent in July to 6.7 per cent in August.

The figures sent shockwaves through the financial sector and bucked forecasts that inflation would rise to 7 per cent or even higher.

Economists and business groups said it would be a mistake for officials meeting today to increase rates for the 15th time in a row from 5.25 per cent to a possible 5.5 per cent.

And financial markets, which until yesterday were firmly betting on another hike, saw the decision as being on a knife edge. Experts at Goldman Sachs and a number of other banks now expect the Bank to keep rates unchanged.

Office space specialist CLS Holdings has swung to a significant loss as interest rate hikes take their toll on the commercial property market.

The FTSE 250 company reported a £106.4million pre-tax loss for the six months ending June, compared to a £21.4million profit in the equivalent period last year.

Although the group’s net rental income tipped up by 5.6 per cent to £55.6million, this was offset by a £142.3million slump in the overall value of its real estate portfolio.

Results: CLS Holdings has swung to a loss amid challenges in the commercial property market

Around half the decline occurred in the UK, where rising rates have hit the business as a result of 14 consecutive Bank of England hikes. 

Its portfolio in Germany also saw a big drop, as rising rates combined with adverse foreign exchange fluctuations.

The London-based firm warned that the challenges facing the property sector are likely to persist until interest rates have ‘definitively peaked’.

But it added that demand is showing signs of recovery, with more employers encouraging staff to work more regularly in the office rather than at home.

Fredrik Widlund, chief executive of CLS, said the company ‘remains focused on executing operational and portfolio improvements, and our geographic diversity and high-quality properties continue to provide resilience and performance.

‘Recent lettings are encouraging and demonstrate our ability to capture opportunities for our properties when they arise.’

Nonetheless, CLS Holdings shares were 5.7 per cent, or 8.2p, lower at 135.2p on late Wednesday morning, making them the biggest faller on the mid-cap index.

Founded as Central London Securities in 1987, CLS operates dozens of buildings, with a particular concentration in London and the South East, that are home to more than 700 tenants.

It was one of the three original partners in the Shard skyscraper before selling its stake in 2008 at a £25million loss to a consortium of Qatari investors.

The group’s results come a day after fellow workspace rental firm IWG credited the hybrid working trend for record turnover and operating profits more than doubling in the first half of 2023.

The Bank of England is expected to hike its base rate to a 15-year high on Thursday, but forecasters are still split of how aggressive it will be.

Market pricing currently favours forecasts of a 25 basis point hike from 5 per cent to 5.25 per cent. 

However, some in the City believe the bank will instead opt for a 50bps rise to 5.5 per cent as the Bank attempts to finish off its fight against inflation, which remains well above its 2 per cent target.

The Bank of England is expected to hike its base rate for the 14th consecutive time on Thursday 

It means more to pain to come for mortgage holders, with the cost of borrowing set to tick higher – but potentially another boost for savers as banks face pressure to pass on the benefit of rate hikes.

The BoE’s Monetary Policy Committee faces a mixed economic picture as it prepares to hike for the 14th time, with falling cost pressures contending with a weakening growth outlook.

Consumer price inflation slowed more than expected in June to 7.9 per cent, thanks to a fall in transport and food prices.

Forecast: The Bank still expects inflation to fall to its 2 per cent target by year-end

But core inflation, while easing, is proving to be ‘stickier’ than expected, while Britain’s labour market also remains stubbornly tight.

And fresh manufacturing data published this week added to concerns about the strength of the UK economy.

Mike Riddell of Allianz Global Investors said easing inflation data gave ‘the Old Lady some breathing space’, but UK business and consumer confidence surveys released recently ‘indicate that UK economic growth is faltering again’.

Riddell, who forecasts a 25bps hike, added: ‘There is also clear evidence that higher mortgage rates are beginning to weigh on the housing market, where prices have now fallen by the most since 2009.’

Data from Moneyfacts shows the average two-year fixed mortgage deal is 6.85 per cent, while the average five-year fixed deal is 6.37 per cent. 

Rising: The Bank of England has been hiking base rate since the end of 2021

But Michael Hewson, chief market analyst at CMC Markets UK, said wage inflation concerns could trump optimism about falling CPI.

He said: ‘Wage growth… has moved above core CPI, and could prompt the MPC to err more towards the hawkish side of monetary policy and raise rates by 50bps, with a view to suggesting that this could signal a pause over the coming weeks as the central bank gets set to consider how quickly inflation falls back over the course of Q3.

‘We can expect to see a hawkish 25bps as a bare minimum, but we could also see a split with some pushing for 50bps.

‘It is also likely to be instructive as to which way new MPC member Megan Greene jumps when it comes to casting her vote. One thing does seem certain, she is unlikely to be dovish as Tenreyro whom she replaced on the MPC.’

After tomorrow, the MPC will meet for a rates decision three more times this year, with meetings lined-up for 21 September, 2 November and 14 December.

Financial markets remain split on where base rate will peak, with pricing indicating the City is unsure whether it will finally settle at 5.75 or 6 per cent in December.

Joseph Calnan, corporate FX dealing manager at Moneycorp, said: ‘We can expect some serious market volatility in the lead-up to and immediately after tomorrow’s announcement, as it’s really anyone’s guess how the BoE responds to the pressure cooker it’s now in. 

‘But the journey certainly won’t stop there. Even if inflation continues to drop, every decision the Bank makes for the next two years will be pivotal in determining how quickly we get our economy back on track.’

High inflation and steep interest rates will push up the cost of servicing the Government’s debt mountain to more than £500billion over the next five years.

The scale of the debt burden lays bare the real cost to taxpayers of a decades-long borrowing binge, according to This is Money’s sister title, the Mail on Sunday.

 Interest payments as a proportion of economic activity are at their highest since the late 1940s, when the country had to shoulder the crippling cost of fighting the Second World War.

The interest bill this year alone is equivalent to more than £4,000 per household. It has raised fears that public spending – including on schools and the health service – may have to be squeezed to balance the books.

The debt interest has to be paid to British and overseas investors who have lent money to the UK Government.

But it represents billions of pounds that could be put to more productive use, funding tax cuts or improving public services.

Heavy weight: The scale of the debt burden lays bare the real cost to taxpayers of a decades-long borrowing binge

The annual interest payment is already on a par with combined spending on education and defence.

Experts say this huge debt burden will be bigger than that of Italy – one of Europe’s most indebted nations – and far higher pro rata than that of the US or Japan, based on recent European Commission data.

‘It is an astonishingly high number,’ said Stefan Koopman, senior macro strategist at investment bank Rabobank.

‘Having to pony up that much to service the costs of existing debt is going to crowd out a lot of spending on public services and investment.’

In its March forecast, the Office for Budget Responsibility estimated interest payments on Government debt would peak this year at £115 billion. At that stage, the watchdog forecast £434 billion in interest charges over the next five years.

But the debt burden – the cost of paying for the nation’s £2.6 trillion of borrowing – is now set to be far higher. This is because a large chunk of it is linked to inflation.

Interest rates have also soared, further pushing up the cost of servicing the Government’s growing debt pile.

The Bank of England last week raised the base rate from 4.5 per cent to 5 per cent.

Traders are betting it could go as high as 6.25 per cent by early next year.

‘Higher interest costs and inflation will add around £20 billion a year to the Chancellor’s annual debt interest bill,’ said Sanjay Raja, UK economist at investment bank Deutsche. That would take this year’s bill to £114 billion (see table below).

‘This will push central Government debt interest costs to well over £100 billion a year all the way through the next five years,’ he added.

He also warned that Chancellor Jeremy Hunt would ‘have very little breathing room to increase spending’.

In his Spring Budget, Hunt vowed to meet the ‘fiscal rule’ he set himself – of debt falling as a proportion of the size of economy in five years’ time.

He had hoped to hit his target with £6.5billion to spare – while delaying public spending cuts until after the next election, due within 18 months.

But Government borrowing is now higher than the country’s entire annual economic output, partly due to the higher interest costs. This is the first time that debt has exceeded gross domestic product since 1961, and it leaves Hunt with little room for manoeuvre.

‘With less than a year and a half to go until the next General Election, calls for the Chancellor to cut a range of taxes have been growing,’ said Ruth Gregory of the Capital Economics consultancy.

But she said recent developments meant he was unlikely to have much scope for giveaways without endangering his fiscal rule.

Debt interest payments would now rise by a ‘huge’ £23billion this year alone, she estimated, taking the total to £117billion – higher even than Deutsche’s forecast – or more than £4,100 per household.

The interest bill will be just as big in 2024-25, according to Samuel Tombs of Pantheon Macroeconomics.

More than a fifth of Government borrowing is linked to the historic Retail Prices Index measure of inflation.

It currently stands at 11.3 per cent, even higher than the headline Consumer Price Index inflation figure of 8.7 per cent.

Manchester City are reportedly making a late intervention in a bid to convince Bernardo Silva to extend his stay at the club.

Silva starred for the Sky Blues last season as City secured the historic Treble by winning the Premier League, Champions League, and FA Cup, but has been tipped for a potential exit.

The riches of Saudi Arabia have piqued Silva’s interest who has been offered a deal that would see him earn over £75m-per-season, with Al-Hilal pushing hard to bring the winger to the Kingdom.

The oil-rich nation has already snapped up some of Europe’s biggest names with Cristiano Ronaldo, Karim Benzema and N’Golo Kante all joining the Saudi Pro League in the past 12 months.

However, City – although unable to match the Saudi mega-money – have offered Silva a new and improved deal in an effort to convince the player to remain in England, according to the Times.

Manchester City have reportedly made an improved contract offer to Bernardo Silva

Silva played an influential role in City’s Treble success last season but could leave the club

Silva’s existing deal still has two years to run, meaning that City could command a hefty transfer fee for the Treble-winning star. However, the club appear keen to ward off any clubs interested in entering negotiations.

The English champions aren’t strapped for cash and if Silva left the club then he would become the first European superstar to leave for the Middle East while at the peak of his career.

Jamie Carragher has warned that if Silva was to move then it would be a game changer for Saudi football, tweeting: ‘Bernardo Silva is in his peak years & has been one of the best players in Europe for the last five years!

‘I wasn’t worried about the Saudi League taking players in their 30’s, a touch worried with players below the elite (Ruben Neves) but if this happens it feels like a game changer.

The 28-year-old is well-loved at Manchester City and has played a pivotal role in the club’s domineering success in recent seasons.

He started 24 of his 34 Premier League appearances and was influential in the Champions League, scoring crucial goals in the competition’s quarter-final and semi-final against Bayern Munich and Real Madrid respectively.

City boss Pep Guardiola (left) is keen to keep hold of the Portuguese star for next season

Silva is being chased by Saudi Pro League side Al-Hilal who are able to offer a huge wage

Guardiola is eager to keep hold of Silva and described him as ‘irreplaceable’ at the end of the season.

‘I’m happy that Bernardo became a winning player,’ Guardiola said. ‘Of course the highlights will be of Erling. But we cannot forget what Bernardo has done, scoring the goal and creating down the right side in the second half.

‘What amazes me about Bernardo is that when the game is going wrong he makes a step forward, he loves to play in this situation. He’s comfortable with it,’ he said.

‘Some players maybe step backward and he makes a step forward. That’s why he is irreplaceable in many ways for us…’

Follow Mail Sport’s live blog for all the latest transfer news on Saturday as West Ham encourage Arsenal to make a third bid for Declan Rice, while Manchester City consider a move for Achraf Hakimi.

Follow Mail Sport’s live blog for all the latest transfer news on Friday as Chelsea step up efforts to sign Moises Caicedo, while Tottenham are gaining confidence over a move for James Maddison.

The Federal Reserve last night left interest rates in the US unchanged for the first time since it kicked off an aggressive round of hikes last year.

The central bank held its benchmark rate at between 5 per cent and 5.25 per cent following ten successive hikes since March 2022.

But in a sign that rates have not yet peaked, officials suggested there would be two further increases before the end of the year.

While further rate rises are therefore likely in the coming months, the move reflected the fact that inflation in the US has fallen to 4 per cent.

Rate relief: The US Federal Reserve (pictured) held its benchmark interest rate at between 5% and 5.25% following ten successive hikes since March 2022

That is still double the 2 per cent target but marks significant progress after inflation peaked at 9.1 per cent in June last year.

By contrast, inflation in the UK is still running at 8.7 per cent having peaked at 11.1 per cent last year.

So while the Fed was last night able to leave interest rates unchanged, the Bank of England looks set to press ahead with further increases next week.

The Bank has already raised rates from 0.1 per cent  to 4.5 per cent since December 2021 and is widely expected to hike them to 4.75 per cent next week. 

It is feared rates could hit 6pc by the end of the year – driving up mortgage costs for millions of borrowers.

With investors betting on yet more rate rises in the UK, the pound rose to a 14-month high against the dollar close to $1.27. 

Sterling also topped €1.17 against the single currency for the first time since August last year.

Official figures yesterday showed the UK economy grew by 0.2 per cent in April as it bounced back from March’s decline.

Against that backdrop, Chancellor Jeremy Hunt warned the Bank has ‘no alternative’ but to hike interest rates again in order to tame runaway inflation.