Bank of England keeps interest rates on hold for first time in two years

The Bank of England chose not to heap more pressure on mortgage holders on Thursday as it kept its interest rate unchanged for the first time in almost two years.

It is the first time since November 2021 that the Monetary Policy Committee has met without deciding to raise interest rates. The MPC also downgraded its forecast for the UK’s economy on Thursday. It now expects gross domestic product to rise just 0.1% in the third quarter of this year, compared with the 0.4% rise it forecast in August.

“Inflation has fallen a lot in recent months, and we think it will continue to do so,” said Bank Governor Andrew Bailey, who voted to keep the rate unchanged. MPC members, including Mr Bailey, have previously warned people against asking for too many pay rises as – they said – that could force inflation up even further.

The four who voted to raise rates said that although there were some signs the economy was weakening, real household incomes had started to rise.

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