The Bank of England is expected to keep interest rates steady at 5%, following its “clear message” that it would not rush to reduce borrowing costs.
Most economists anticipate that the Monetary Policy Committee (MPC) will maintain the UK interest rate at its current level later today. This would keep the Bank’s Base Rate, which influences borrowing and saving interest rates, at its highest point since the 2008 global financial crisis.
In August, the central bank lowered rates from 5.25%, marking the first cut since 2020 and providing some relief to borrowers across the country. Governor Andrew Bailey stated that this was possible due to inflationary pressures having “eased enough,” but he emphasized that policymakers must be cautious about cutting rates too rapidly or by too much.
Matt Swannell, chief economic adviser at EY Item Club, noted that the MPC had “sent a clear message that consecutive rate cuts are unlikely” unless future economic data turns out weaker than expected.
Sanjay Raja, chief UK economist at Deutsche Bank, concurred, stating that the latest inflation data—showing Consumer Price Index (CPI) inflation holding at 2.2% in August—would not be sufficient to prompt a faster rate cut.
