Bank of England holds rates at 5.25% after inflation falls

MPC in split decision after inflation unexpectedly fell in August

Valeria Martinez
clock • 3 min read

The Bank of England (BoE) has paused its hiking cycle and opted to keep interest rates at the current level of 5.25% after inflation unexpectedly fell in August.

It was a tight split decision by the Bank, with five members of the Monetary Policy Committee voting to maintain the Bank Rate at 5.25%, while four members preferred to increase rates by 25bps to 5.5%. Investors had widely predicted the 15th rise in a row to 5.5% from 5.25%, but this morning only half of investors expected a rise after it was reported on Wednesday (20 September) that UK inflation unexpectedly fell to 6.7% in August.  The Federal Reserve also opted to leave its benchmark rate unchanged on Wednesday, while the European Central Bank decided to hike rates by 25bps last we...

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