UK inflation: Bank of England set to reveal next decision

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The Bank of England is widely expected to keep interest rates on hold on Thursday after the latest UK inflation figures remained stubbornly high.

Most economists think the Monetary Policy Committee (MPC) rate-setters will keep base rate unchanged at 5 per cent, its highest level since 2008, during the global financial crisis.

The Bank cut rates from 5.25 per cent last month – the first reduction since 2020, in a move welcomed by squeezed borrowers still suffering from the cost-of-living crisis. The move disappointed savers, however.

Bank of England governor Andrew Bailey said it had been able to cut the base rate because inflationary pressures had “eased enough”.

August’s inflation was unchanged at 2.2 per cent, which was higher than the Bank of England’s 2 per cent target but was below the 2.4 per cent the Bank itself had predicted at this stage.

Keeping the base rate on hold means mortgage repayments are unlikely to change.