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The Bank of England has held interest rates at 5% on Thursday which will be a disappointing blow for borrowers.
In August the bank cut rates by 25 percentage points to 5% and it was previously thought that interest rates were going to fall this month.
The Bank of England boss Andrew Bailey said, “We should be able to reduce rates gradually over time… but it’s vital that inflation stays low, so we need to be careful not to cut too fast or by too much.”
Susannah Streeter, head of money and markets at Hargreaves Lansdown warned there is “niggles of concern” amid the core and services inflation.
She said, The rise in both core and services inflation may make Bank of England policymakers a bit more wary about voting for a back-to-back rate cut.
“It still seems likely that they will decide to keep interest rates paused this month, and instead wait to cut rates again in November and December. That is the scenario being priced in by financial markets, which see more than a 73% likelihood that rates will be kept on hold but that more cuts will come later in the year.”
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