Bank of England announces latest interest rates decision

The Bank of England has announced that interest rates will be held at 5 per cent.

Rate-setters on the Monetary Policy Committee (MPC) decided not to cut the base rate, which affects interest rates on borrowing and saving, at their meeting on Thursday morning.

The central bank cut interest rates from 5.25 per cent to 5 per cent in August - the first rate cut since 2020 - but economists had predicted that back to back rate cuts would be unlikely while interest rates remain above the 2 per cent target. Consumer Prices Index (CPI) inflation remained at 2.2 per cent in August.

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Bank governor Andrew Bailey had previously said that policymakers “need to be careful not to cut interest rates too quickly or by too much”.

It comes after the European Central Bank (ECB) decided to cut interest rates in the Eurozone last week, the second reduction in a row. The ECB’s rate-setting council lowered the main deposit rate from 3.75 per cent to 3.5 per cent at the meeting.

Elsewhere, the US’s Federal Reserve implemented its first cut to the nation’s interest rates in four years on Wednesday evening, lowering the rate by half a percentage point.