BoE Holds Interest Rates at 5%

The Bank of England has decided to hold interest rates steady at 5%, with Governor Andrew Bailey indicating that rates are “gradually on the path down.” This decision follows a recent cut from 5.25% in August, the first reduction since the pandemic’s onset.

Despite the decline in inflation to 2.2% last month, Bailey emphasized the need for caution, stating that more evidence is needed to ensure inflation remains low before further cuts are made. Experts anticipate additional rate reductions later this year, potentially in November, as the Bank navigates a delicate balance between curbing inflation and supporting economic growth.

Higher interest rates have led to increased borrowing costs, impacting mortgages and credit cards, while also benefiting savers with better returns. As the Bank of England carefully monitors inflation trends, the potential for future rate cuts remains, but Bailey warned against moving too quickly, underscoring the importance of maintaining stability in the fight against inflation.