Judging by the state of the UK economy, the Bank is done with interest rate hikes

An unexpected drop in headline inflation in August was another factor indicating firms and consumers were feeling the strain of higher borrowing costs. Photograph: Maja Smiejkowska/Reuters

The economy is slowing by more than the Bank of England expected only a few months ago and this trend warrants the first pause in a cycle of interest rate rises going back to December 2021.

This was the message from the Bank’s monetary policy committee (MPC) on Thursday after its decision to maintain interest rates at 5.25%.