The Bank of England has held interest rates at 4%, in line with expectations.
The Monetary Policy Committee (MPC), which sets monetary policy to meet the 2% inflation target, has voted by a majority of 5–4 to maintain Bank Rate at 4%.
Four members voted to reduce Bank Rate by 0.25 percentage points, to 3.75%.
Reacting, Alpesh Paleja, deputy chief economist, CBI, said: “Today’s decision marks the first pause in quarterly rate cuts since the MPC began easing policy in August 2024. The hold is understandable: the Committee wants to wait out the Autumn peak in inflation and see if households’ inflation expectations ease from still-high levels.
“The Bank will also be waiting for clarity from the Autumn Budget, its impact on the growth and inflation outlook, and how pay settlements for next year are shaping up.
“Beyond today, though, the case for further cuts is strengthening. Economic momentum remains sluggish, as reflected in the CBI’s business surveys, and the MPC seem to be more reassured about the risks from greater inflation persistence. As a result, a couple more rate cuts in the coming months look likely.”
