Bank of England governor says ‘no room for complacency’ after leaving interest rates on hold – as it happened

Activists from the group Positive Money holding a protest against interest rate hikes and profiteering outside the Bank of England. Photograph: Vuk Valcic/ZUMA Press Wire/Shutterstock

4.11pm BST

Afternoon summary

Time to recap….

The Bank of England governor, Andrew Bailey, has said it would be “very, very premature” for policymakers to start talking about rate cuts, after the central bank left borrowing costs unchanged today.

Bailey said the impact of the Bank’s 14 rate rises since December 2021 were now “coming through”, with inflation falling in August.

Speaking to broadcasters, he added:

Our job is to get inflation down, we’ve got a big job to do, we’ve got quite a long way to go yet. It’s encouraging. But I’m afraid we can’t be complacent, and of course we will watch the evidence very carefully as we always do.

In a video clip released by the Bank, Bailey insisted there was “no room for complacancy”.

Andrew Bailey explains today’s decision on interest rates. Inflation has fallen a lot in recent months, and we think it will continue to do so. That’s welcome news. But there is no room for complacency. pic.twitter.com/364tkcTrb2

— Bank of England (@bankofengland) September 21, 2023

The Bank surprised some in the City by resisting raising interest rates for the 15th time in a row today, instead leaving base rate at 5.25%.

The vote was very close, though, with four policymakers pushing for a rise, but being narrowly outvoted by the other five.

Exposing a split within the Bank’s most senior ranks, four members of the MPC, including the outgoing deputy governor Jon Cunliffe, were outvoted in pushing for a quarter-point rise. Cunliffe joined three of the independent economists on the nine-strong panel advocating for tougher action to bring inflation back to more sustainable levels.

Here’s the full story:

And analysis:

Some City economists believe UK interest rates are now at their peak, and will remain at 5.25% until the Bank starts to cut next year.

The pound fell to a six-month low below $1.23 against the dollar after the decision was announced.

Martin Lewis, the consumer champion, warned that savings rates may start to fall quickly.

Here’s the rest of today’s news:

4.03pm BST

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