Tommy Lumby
BBC business data journalist

Prices across the UK rose at an average rate of 3.4% in the year to May, meaning inflation remained at its highest level for more than a year.

April’s figure was initially published as 3.5% but was later corrected to 3.4% after an error with the data was discovered.

The latest figure was a touch higher than some market analysts had predicted, and as this chart shows, still well above the Bank of England’s 2% target.

This slightly elevated level of inflation isn’t necessarily an immediate cause for concern. Official forecasts expect the rate to rise this year before falling back towards the Bank’s target.

But these numbers don’t capture the recent rise in oil prices caused by the worsening conflict in the Middle East.

Dearbail Jordan
Business reporter

Good morning from a roasting Threadneedle Street in the City of London. I’m at the Bank of England where I’m covering the interest rate decision.

We journalists see the announcement before the rest of the world and, because the information is so market sensitive, the Bank locks us in a basement so it doesn’t leak out before the official release at 12:00 BST.

That sounds a bit scary, but it really isn’t. An hour or so before the announcement, we’re led down into the bowels of the Bank of England – the decor is 1970s bunker chic – where we’re asked to put our phones in a locker. We’re allowed to keep our laptops but the wi-fi is switched off until midday.

We work from a guarded, secure room where there is enough tea and biscuits to keep our brains fuelled. At that point, we get the rate announcement and a bunch of pages on how the Bank reached its decision. We ruminate, translate and then get our story ready for midday when it will magically appear in front of your eyes.

There is sometimes a press conference afterwards, but not today. See you on the other side.

Interest rates reflect the cost of borrowing money or the reward for saving money. For example, if you borrow £100 from a bank and it charges a 5% interest rate, you will pay back £105. If you have £100 in savings and the interest rate is 5% your savings will rise to £105.

The Bank of England is the UK’s central bank and it is independent from the government.

It sets a “base rate” and this influences how much lenders will charge borrowers who take out a mortgage, a loan or a credit card. So if the Bank of England puts its interest rate up, that means you'll pay more interest on borrowed money - unless you’ve borrowed it at a fixed rate.

Interest rates are often a big deal for people with mortgages who do not have a loan with a fixed rate, or have a fixed-rate deal ending soon.

But it is not all bad news, as higher interest rates should mean an increase in the interest people earn on savings - though banks can be slow to pass on these rises.

Read more: How an interest rate rise affects you and your money

The Bank moves interest rates up and down in order to control UK inflation - which is the increase in the price of something over time.

When inflation is high, it may decide to raise rates to bring inflation back down towards its 2% target. The idea is to encourage people to spend less and reduce demand. Once inflation is at or near the target, the Bank may hold rates, or cut them.

It has to balance the need to slow price rises against the risk of damaging the economy, and avoid cutting rates only to have to raise them again shortly afterwards.

While its remit is not to stimulate growth, the Bank is under pressure to help boost growth, which has been sluggish for some time.

Thanks for joining us as we get ready for the latest Bank of England decision on interest rates.

The Bank’s rate, which dictates borrowing costs for households and businesses - such as mortgages and loans, currently stands at 4.25%.

Most analysts are not expecting any change today and think further cuts will not arrive until later in the year, as the rate of price rises remains above target.

But there are conflicting factors for the Bank’s Monetary Policy Committee (MPC) to consider, including the state of the economy, global tensions and the fall-out from the US policy on tariffs.

We'll hear the decision at 12:00 BST. Stay with us as our experts explain what it all means for your money and the economy.