Bank of England’s decision to keep interest rates at 4% is not all doom and gloom

A fall in interest rates from 4% to 3% would still be well above the prolonged period of ultra-low rates that mortgage borrowers had become accustomed to after the 2008 financial crisis. Photograph: Amer Ghazzal/Shutterstock

There were reasons to be cheerful contained within the Bank of England’s latest verdict on the outlook for the UK economy, released alongside its decision to leave interest rates unchanged at 4%.

Inflation, it said, had peaked at 3.8% and was expected to fall steadily back to the Bank’s 2% target sometime in 2027. That is an improvement on its thinking in August (the last time it published forecasts), when inflation was expected to peak at 4%.