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The Independent UK
The Independent UK
National
Andy Gregory

UK interest rates live: Bank of England holds at 5% after shock US Fed cut

Bank of England governor Andrew Bailey said the central bank needed to be ‘careful to not to cut interest rates too quickly or by too much’ in August (Alberto Pezzali/PA) (PA Wire)

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The Bank of England is widely expected to keep interest rates on hold on Thursday after the latest UK inflation figures remained stubbornly high.

Most economists think the rate-setters on the Bank’s Monetary Policy Committee (MPC) will keep the base rate unchanged at 5 per cent, a level which – prior to last year – had last been seen in 2008 during the global financial crisis.

The Bank cut rates from 5.25 per cent last month – the first reduction since 2020, in a move welcomed by squeezed borrowers still suffering from the cost-of-living crisis. The move disappointed savers, however.

Bank of England governor Andrew Bailey said it had been able to cut the base rate because inflationary pressures had “eased enough”.

August’s inflation was unchanged at 2.2 per cent, which was higher than the Bank of England’s 2 per cent target but was below the 2.4 per cent the Bank itself had predicted at this stage.

Keeping the base rate on hold means mortgage repayments are unlikely to change.

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