Bank of England holds interest rate at 4% as inflation remains elevated

The Bank of England (BoE) has kept its key interest rate on hold at 4% amid the UK’s inflation remaining marked above ￰1￱ expectations of a further 25-basis-point cut on borrowing rates, five of the nine members of the Bank’s Monetary Policy Committee voted for unchanged rates while four backed a ￰2￱ Governor Andrew Bailey said the bank still believes rates are on a gradual downward ￰3￱ also stressed that the BOE needs to be sure that inflation is falling back to the central bank’s 2% target before another rate ￰4￱ expects inflation to drop early next year The Monetary Policy Committee voted by a majority of 5-4 to keep interest rates at 4%. Find out more: ￰0￱ #InterestRates #BankOfEngland #BoE ￰5￱ — Bank of England (@bankofengland) November 6, 2025 Britain’s annual rate of consumer price inflation is currently standing almost twice the BOE’s 2% target, at 3.8%, which is the main reason rates were kept ￰6￱ also expects the current inflation to be the peak.

BoE’s governor also suggested that inflation will drop close to 3% early next year, and then fall towards the Bank’s ￰7￱ said that upside risks to inflation have decreased since August, and he expects further policy easing to follow if disinflation becomes more clearly established in the weeks ahead. “We held interest rates at 4% ￰8￱ 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% target before we cut them again.” – Andrew Bailey , Governor of the ￰9￱ BOE’s interest rate decision comes as Chancellor Rachel Reeves prepares to raise taxes in the Budget on November ￰10￱ emphasized in her speech this week the need to address inflation in order to facilitate lower interest ￰11￱ the time of publication, financial markets have given the chances of a rate cut in December a probability of less than 30%.

However, rate setters will have to digest Reeves’ budget before the Bank’s policymakers can make decisions about a December rate ￰12￱ Hewson, head of financial analysis at AJ Bell, argued that Reeve’s surprise press conference on Tuesday was partly a cry for help to the ￰13￱ BOE stressed the state of the economy, noting that unemployment was rising gradually to a high peak above 5% early next year amid low hiring ￰14￱ Bank cautioned that speculation over this month’s budget had probably contributed to weakness in the economy in recent ￰15￱ also warned that the budget led households to keep a lid on spending amid heightened pressures on living ￰16￱ Bank of England forecasts a weaker growth rate of 0.2%.

The Bank found a drop in exports to the U. S., as well as disruptions to the UK’s manufacturing base linked to the Jaguar-Land Rover cyber-attack, had pulled down output in ￰17￱ expects to increase income tax Reeves hinted at an increase in income tax in the budget, arguing that public finances are in a worse state than expected after years of economic ￰18￱ also said she’s facing the world as it is, noting that economic challenges facing the UK, including global tariffs and sticky inflation, had worsened since last year’s financial ￰19￱ Reeves’ tax hike could potentially break Labour’s manifesto on tax, she insists that she has to do the right thing even if it proves ￰20￱ Chancellor stated that the budget would focus on the priorities of British citizens, including the NHS and reducing the cost of living and national ￰21￱ said that even though there will be a lot of speculation about the choices she makes, she believes the choices are important and will shape Britain’s economy for years to ￰22￱ Chancellor also speculates that the government will again attempt welfare reform after Labour MPs blocked plans to overhaul the system earlier this ￰23￱ your strategy with mentorship + daily ideas - 30 days free access to our trading program