Interest rates held at 5%, Bank of England confirms

The Bank of England has left interest rates unchanged at 5%, but said it could reduce borrowing costs “gradually over time” if inflation stays low.

Eight of the nine members on the Bank’s Monetary Policy Committee (MPC) voted to keep the UK base rate unchanged on Thursday.

The decision to pause comes a month after the central bank cut rates from 5.25%, instigating the first reduction since 2020 and delivering good news to borrowers facing higher costs.

Andrew Bailey, governor of the Bank of England, said on Thursday: “Inflationary pressures have continued to ease since we cut interest rates in August.

“The economy has been evolving broadly as we expected.

“If that continues, we should be able to reduce rates gradually over time.

“But it’s vital that inflation stays low, so we need to be careful not to cut too fast or by too much.”

The decision comes a day after UK inflation stuck at 2.2% in August, above the Bank’s 2% target.

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