Interest rates stay at 5.25%

02 Feb 2024

UK interest rates have been left unchanged at 5.25% by the Bank of England.

It is the fourth time in a row the Bank has held rates after previously raising them 14 times in succession as it attempted to bring inflation down.

The Bank also published its inflation report, which predicts that inflation will fall back to its target of 2% between April and June this year, before rising again.

Anna Leach, Deputy Chief Economist at the Confederation of British Industry (CBI), said the decision would come as a relief to businesses and households.

She said: 'While inflation is following a downward trend towards the 2% target, it's not clear whether rates will follow suit. Relatively high wage inflation alongside an uptick in services inflation in December means that a rate cut before the summer is increasingly unlikely to materialise.

'However, that won't stop pressure piling onto the Bank of England to reduce rates as weakness in the economy persists. A rebound in growth in November following the previous month's decline is encouraging but masks the overall picture of a flatlining economy, still at risk of technical recession.

'The stakes are high for business bearing the brunt of higher borrowing costs and soft demand. They desperately need certainty on monetary policy alongside a package of measures from government to kickstart productivity and growth.'