The Bank of England has voted to hold the UK base rate at 4% following its latest Monetary Policy Committee (MPC) meeting, with a narrow split of five members voting to maintain rates and four in favour of a cut.
The decision keeps borrowing costs unchanged as policymakers weigh signs of easing inflation against uncertainty surrounding the government’s forthcoming Budget.
Inflation across the UK rose by an average of 3.8% in the year to September — still almost double the Bank’s 2% target, but slightly below the 4% increase many economists had expected.
While the trend indicates that inflation is moving in the right direction, the MPC said it was not yet ready to lower rates, preferring to await greater clarity on how Chancellor Rachel Reeves’s Budget on 26 November might influence growth, spending, and wider economic stability.
However, the tone of the meeting and the latest economic data have fuelled expectations of a possible rate cut in December, should inflation continue to ease and the wider economy show further signs of slowing
Responding to the Bank of England’s closely contested decision to hold the base rate, Darren Thomas of Sunderlands said:
“Today’s narrowly decided outcome signals that policymakers remain cautious as they await clearer evidence that inflation is firmly under control.
“While the pace of interest rate reductions has been slower than many anticipated, future cuts will still play a key role in stimulating buyer demand and supporting house price growth over the next five years.
“When combined with more flexible mortgage lending criteria – allowing some buyers to borrow a higher multiple of their income – and a stronger UK economic outlook beyond 2026, we anticipate renewed upward pressure on house prices.
“Ahead of the next rate announcement, all eyes will turn to the forthcoming Budget and the reaction of the financial markets. Any measures introduced by the Treasury are likely to have a more significant impact on the prime property sector andtransaction volumes than on the broader mainstream market.”
