The Bank of England has kept interest rates on hold at 4%, as expected, following a closely split vote by its Monetary Policy Committee (MPC).
The decision means borrowing costs will remain at their current level for now, disappointing borrowers hoping for a sixth rate cut since August 2024 — but offering some relief to savers.
In a 5–4 vote, a slim majority of policymakers opted to hold Bank Rate steady. Bank of England governor Andrew Bailey cast the decisive vote to keep interest rates on hold at 4%, after a closely divided Monetary Policy Committee (MPC) meeting.
According to the minutes released alongside the decision, five of the nine MPC members, including Bailey, voted to maintain Bank Rate at 4%, while four members pushed for an immediate quarter-point cut to 3.75%.
The move comes despite official data showing UK inflation eased to 3.8% in September, below forecasts but still almost double the Bank’s 2% target.
Chancellor Rachel Reeves said this week that lowering inflation would be central to her upcoming Budget, due later this month. Speaking from Downing Street, she said:
“The choices I make in this Budget, this month, will be focused on getting inflation falling and creating the conditions for interest rate cuts to support economic growth and improve the cost of living.”
Analysts at Capital Economics expect Reeves to pursue around £38 billion in new tax rises in the Autumn Budget, on top of the £41.5 billion implemented last year — taking the total to just under £80 billion in additional revenue measures.
