With inflation staying at 2.2%, will Bank of England cut interest rates this week?

City investors expect Threadneedle Street will keep interest rates at 5% Photograph: Alberto Pezzali/AP

For a second month running, inflation has fallen short of the Bank of England’s expectations. After beginning the process of cutting interest rates last month, the big question is whether Threadneedle Street could cut again on Thursday.

There is little doubt inflation has returned to more manageable levels, having dropped from a peak of 11.1% less than two years ago, the highest since the 1980s. With the consumer prices index at 2.2% in August, matching the level in July, the reading was below the 2.4% level the Bank expected.