The Bank of England has held interest rates at 5.25%.
The Bank of England’s Monetary Policy Committee (MPC), which sets monetary policy to meet the 2% inflation target, voted by a majority of 6–3 to maintain Bank Rate at 5.25%.
Three members preferred to increase Bank Rate by 0.25 percentage points, to 5.5%.
It marks the third interest rates pause following a run of 14 increases as the Bank tries to get inflation under control. Looking ahead, the MPC noted in a statement that “monetary policy is likely to need to be restrictive for an extended period of time.”
David Bharier, Head of Research at the British Chambers of Commerce, said: “While a cut in the interest rate could have provided some relief for firms ahead of Christmas, today’s decision to hold at 5.25% was expected and allays fears of further rises.
“UK businesses have been faced with the twin shock of an inflation crisis and increased borrowing costs. Around half of the businesses we survey report a direct negative impact from the current interest rate, while only around one in ten see a benefit.
“The BCC’s latest Economic Forecast expects only a 0.25% point cut in the interest rate for the whole of 2024, although businesses need to be prepared for any unexpected changes given the uncertain policy landscape.
“SMEs have been operating in an uncertain climate for too long, with policies constantly chopping and changing over the past few years. They need to see clear direction from decision makers, creating a roadmap for business that boosts confidence and investment.”
