Interest rates LIVE: Bank of England holds at 4% in another hammer blow to Reeves

The Bank of England has maintained its key interest rate at 4% for the second consecutive meeting, a decision reached by a narrow five-to-four vote from its Monetary Policy Committee. This decision, made just before the autumn Budget, signals that while policymakers believe inflation has peaked and is expected to fall gradually towards the 2% target by 2027, they are balancing the risks of persistent inflation against a weakening economy. Governor Andrew Bailey stated that inflation remains too high, and the hold reflects a careful balance between these competing risks. He indicated that rate cuts are anticipated in the longer term if inflation continues on its downward trajectory. This decision offers no immediate relief for the Chancellor, who may have hoped for a rate cut to stimulate consumer spending and business investment. Despite the base rate freeze, some lenders have reduced their fixed mortgage rates, leading to increased competition in the mortgage market. However, savings rates are generally on a downward trend. Economists are divided, with some suggesting a December rate cut is likely due to the narrow vote split and the potential fiscal tightening from the upcoming Budget, which cou... download the app to read more