The Bank of England has decided to keep interest rates unchanged at 4%, citing ongoing worries about inflation remaining above its target level.
The Bank’s nine-member monetary policy committee (MPC) voted by a majority of seven to two to leave borrowing costs unchanged, after five cuts since summer 2024, including a reduction last month, News.Az reports, citing the Guardian.
The MPC had been widely expected to pause rate cuts this month, with annual inflation running well above the Bank’s 2% target, at 3.8% in August.
August’s rate cut required an unprecedented two rounds of voting before it could be agreed, with external MPC member Prof Alan Taylor initially preferring a half-point reduction, before joining the narrow majority for a quarter-point.
Bank policymakers have been balancing the risks of rising inflation – caused in part by a jump in food prices – against a continuing slowdown in the jobs market, with unemployment at a four-year high.
The chancellor, Rachel Reeves, has said she wants the government to do more to tackle the cost of living, arguing this is one justification for keeping government spending under control.
The MPC’s decision to hold rates widens the gulf between its stance and the US Federal Reserve, which reduced interest rates by a quarter of a percentage point on Wednesday, its first rate cut since December.
