The Bank of England has kept the base rate unchanged at 4% in a narrow 5–4 vote, with four Monetary Policy Committee (MPC) members preferring a cut to 3.75%. The decision, widely expected with the Budget only weeks away, reflects a cautious stance as inflation pressures ease.
The MPC noted that inflation risks have “become less pronounced recently”, suggesting confidence that the peak has passed. Inflation has remained at 3.8% for three consecutive months, despite ongoing wage and service pressures.
Suren Thiru, economics director at ICAEW, said the decision would feel “a particularly tough break” for households facing high mortgage costs and firms bracing for potential tax rises in the upcoming Budget. He warned that higher business costs could keep inflation more stubborn than forecast.
The last time the base rate was cut was back in July. The decision signals that fiscal policy, rather than monetary measures, may take centre stage this winter.
With the next rate decision due on 18 December, analysts anticipate a potential pre-Christmas cut, depending on how inflation and the 26 November Budget unfold.
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