Bank of England leaves interest rate unchanged at 5.25 per cent

Following a meeting of the Monetary Policy Committee this morning , members voted in favour of holding rates at 5.25 per cent. It highlighted that the economy is not yet in the right place to allow the Bank to begin cutting the base rate.

None of the nine members of the decision making body voted in favour of an increase. Eight members said rates should be kept the same at least until the next meeting. However, this doesn't mean that rates won't be cut anytime soon, with some experts predicting a cut as early as late spring or early summer.Following the decision to hold rates at 5.25 per cent, Bank of England governor Andrew Bailey said: “In recent weeks we’ve seen further encouraging signs that inflation is coming down.

“We’re not yet at the point where we can cut interest rates, but things are moving in the right direction.” This is the fifth consecutive time the Bank has decided to freeze the base rate which has a direct influence on mortgage rates and payback loans across the country. It comes after the latest CPI figures showed that the annual rate of inflation fell to 3.4 per cent in February - down from 4 per cent.

Inflation is now expected by many experts to fall to 2 per cent in April, which may open the way for the base rate to begin to fall in the near future.

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