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The Bank of England is widely expected to cut interest rates on Thursday, a move closely watched by businesses and consumers.
Most analysts expect the benchmark rate to rise from its current level of 5% to 4.75% when the decision is announced at 12:00 GMT.
This would make borrowing cheaper, but would likely reduce the returns available to savers.
The Bank's Monetary Policy Committee (MPC) meets eight times a year to set rates.
Expectations from the Bank of England
The Bank of England cut interest rates from 5.25% to 5% in August, the first cut in more than four years after a series of hikes.
Since then, official figures have revealed that the UK inflation rate – which reflects the rising cost of living – unexpectedly fell to 1.7% in September.
This is the lowest rate in three and a half years and below the 2% target set by the government. Interest rates are the main tool the Bank has to control the level of inflation.
Subsequent figures from the Office for National Statistics (ONS) showed that wage growth slowed to its lowest pace in more than two years.
This increased the likelihood of a cut in bank rates.
The Bank's governor, Andrew Bailey, also told the Guardian last month that it could be “a little more aggressive” in reducing borrowing costs, depending on the rate of inflation.
How it affects borrowers and savers
The bank's base interest rate strongly influences the rates that major banks and other money lenders charge customers for loans, as well as for credit cards.
Lenders have mostly 'factored in' the impact of a base rate cut when making decisions about their own interest rates.
Mortgage rates are still much higher than they have been for much of the last decade. The average two-year fixed mortgage rate is 5.4%, according to financial information company Moneyfacts. A five-year contract has an average rate of 5.11%.
However, more than a million borrowers on tracker and variable agreements could see their monthly repayments fall immediately if the Bank cuts rates.
Savers would likely see a reduction in the returns offered by banks and building societies. The current average rate for an easy-access account is around 3% per year.
Rachel Springall, of Moneyfacts, said: “Savers are the ones feeling the force of interest rate cuts. Savers who use their interest to supplement their income will feel neglected if rates fall.”
Impact on the US budget and elections
Political events will influence the Bank's decision on Thursday, particularly last week's budget presented by Chancellor Rachel Reeves and Donald Trump's victory.
The government's official but independent forecaster, the Office for Budget Responsibility, said that in the short term the measures announced in the budget would push inflation and interest rates higher than they should be. would have been otherwise.
This created more doubts over whether the Bank of England would cut interest rates again after its December meeting.
At the same time, analyst forecasts suggest that US inflation will be higher as Trump introduces higher tariffs on all imports next year.
That would give the Federal Reserve less room to lower interest rates and could affect decisions made around the world, they said.
What are my savings options?
As a saver, you can shop around for the account that suits you best. Loyalty often doesn't pay off, as older savings accounts have some of the worst interest rates. Savings products are offered by a range of providers, not just the big banks. The best deal isn't the same for everyone – it depends on your situation. Higher interest rates are offered if you lock your money away for longer, but this won't suit everyone's lifestyle. costs
There is a guide to different savings accounts and things to consider on the independent, government-backed MoneyHelper website.
What are interest rates? A quick guide.
