Bank of England keeps interest rates at 5.25% but hints at a June cut

Threadneedle Street said inflation was on course to hit 2% and would fall to just 1.6% in two years, opening the door to future interest rate cuts. Photograph: Toby Melville/Reuters

The Bank of England has signalled it could start cutting interest rates as early as next month after inflation was found to be “moving in the right direction”, as it kept borrowing costs on hold at 5.25% for the sixth time in a row.

Alongside the decision to keep rates on hold, the Bank said inflation was already on course to hit its target of 2% and would fall to just 1.6% in two years, opening the door to future cuts in interest rates.