Bank of England confirms fourteenth consecutive rate rise

The 0.25% increase, voted for by six of the nine members on the Bank of England’s monetary policy committee (MPC), mean interest rates are now at 5.25%. Of those that voted against, two would have preferred an increase of 0.5% while the other believed rates should have been maintained at five percent.

It comes just a couple of weeks after the Office for National Statistics announced a drop of 0.8% in inflation to 7.9% in June – lower than expected by the MPC – with the committee now expecting inflation to fall to around five percent by the end of the year, accounted for by lower energy, food and core goods price inflation.

It now also expects inflation to return to its two percent target by the second quarter of 2025. It then falls below the target in the medium term, as an increasing degree of economic slack reduces domestic inflationary pressures, alongside declining external pressures.