City expects interest rates to exceed 4% next year Interest rates will rise to more than 4% next year and remain there into 2024, according to City experts. The Bank of England has raised interest rates at six consecutive meetings as it looks to tackle soaring inflation, with the base rate now at 1.75%. While analysts last month predicted that rates would hit a peak of 3% this year before dropping back in 2024, SONIA, a key commercial benchmark used to set mortgage rates, suggests interest rates will hit 4% in February. The forecast suggests a peak of 4.4% will come in June next year and not dip back below 4% before April 2024. Jackie Bowie, of risk consultancy Chatham Financial, says the “scale and acceleration of the market's interest rate expectations is significant.”