The Bank of England has announced it will hold interest rates at 5 per cent.
The central bank's Monetary Policy Committee met today (September 19) and voted eight to one to keep rates constant.
The only dissenting member of the committee voted to lower rates to 4.75 per cent
This follows the decision to drop the base rate that was taken at the committee’s last meeting on August 1.
The committee stated that its decision was guided by the need to squeeze “persistent inflationary pressures” out of the system so as to return CPI inflation to the 2 per cent target both in a timely manner and on a lasting basis.
Chetwood Financial CEO, Andy Mielczarek, said: “The Bank of England’s decision comes as no surprise and reinforces the sentiment that a period of economic stability is best for Britons.
“With inflation holding steady, it’s important that the central bank leads by calm and confident example to the public, and it has done precisely that.
“Whilst existing mortgage holders would have liked to have seen a further reduction, they can remain optimistic that the borrowing environment will be less temperamental and that they can make confident longer-term financial decisions.
“New customers can be hopeful that this period of stability continues, and that a more beneficial mortgage outlook can make their investment decisions more attractive.
“For the time being, savers will be happy the rate has remained the same but could be forgiven for thinking it may be the last chance to maximise returns, especially on fixed-rate savings products.
“They must remain diligent in searching the market for the best returns before a potential further reduction to the base rate.”
Stonebridge chief executive Rob Clifford, said: “Despite inflation dropping significantly, the MPC remains concerned about residual price pressure, which is why it has decided to hold rates again today.
“While inflation is near the central bank’s target, services inflation is still stubbornly high, which is critical given that services make up 80 per cent of the UK economy.
“Similarly, while wage inflation – another key measure concerning the MPC – is easing, it too still significantly outstrips inflation.
“However, with the UK economy showing signs of stagnation, the Bank of England is under increasing pressure to pull the trigger on another rate cut which we would certainly welcome.
“Given that, we expect a likely 25 basis point cut at the MPC’s next meeting in November, with further reductions leaving the benchmark rate at around 3-3.25% by the end of next year.”
Meanwhile, Abrdn adviser chief commercial and strategy officer, Jonny Black, said: “The decision to hold the base rate comes as no surprise, and all eyes are now looking ahead to November for a possible ‘end of the year cut’.
“But the Bank of England won’t pull the trigger until its sure inflation is under control and can fully gauge the impact of Rachel Reeves’ upcoming Autumn Statement, which promises tough sacrifices ahead for the country.
