BoE Holds Bank Rate at 4% in Narrow 5-4 Vote Ahead of Budget

The Bank of England left its main interest rate unchanged at 4 percent on Thursday, with the nine-member Monetary Policy Committee voting 5 to 4 to hold borrowing costs as policymakers awaited clearer evidence that inflation will return to target. The decision, taken at the committee's final meeting before the autumn Budget, preserves the benchmark rate that helps determine mortgage, consumer and business borrowing costs.

Officials said the central bank's primary concern was that consumer price inflation remains elevated at 3.8 percent, nearly double the Bank's 2 percent target. In accompanying minutes, the committee said inflation likely peaked in September and is expected to fall over coming months, but members want confirmation that disinflation is sustained before resuming cuts. Bank Governor Andrew Bailey said, "We still think rates are on a gradual path downwards, but we need to be sure that inflation is on track to return to our 2 percent target before we cut them again."

The vote was the narrowest since the committee began cutting rates in August 2024, when it started easing policy on a roughly once-every-three-months cadence. Thursday represented the first pause in that...