September 21st 2023 3:08 pm

Written by Daniel Flynn

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Bank of England Holds Interest Rates at 5.25 Percent

After 14 interest rate increases in a row since early 2022, the Central Bank has opted to hold fire at today's meeting.

In August the base rate of interest was raised to 5.25 percent - and it was expected to see a 15th consecutive rise today and hit a recent-times record of 5.5 percent - however the monetary police committee decided to hold fire.

Another 0.25 percent climb was in many forecasters crystal balls but yesterday a data release from the Office for National Statistics put the nation's inflation figure at 6.7 percent - still way above where it should be (2 percent) but importantly a drop from the month before. CPI was 6.8 percent in July so the 0.1 percent drop in the consumer price index inflation marker was enough to give confidence to the BoE to hold rates steady at this meeting.

Prior to the confidence inspiring CPI figure being released the vast majority saw an interest rate increase on the cards, but this turned to an even split of increase to decrease once the 6.7 percent figure was made public.

The government is still aiming to get inflation down to 5.3 percent post-Christmas. The rate rises appear to be working as in January the inflation CPI marker was at 10.7 percent and has dropped 4 percent since then, so there is a small way to go. If inflation doesn't continue to drop or turns and starts to rise again then it is a certainty that the next MPC meeting will see a rate rise - possibly sharper than previously due to holding rates today.

People with variable, discount or tracker mortgages can breathe a sigh of relief as they will not be hit with another monthly rise in the mortgage payment - as can those with outstanding balances on credit cards, loans and overdrafts. Conversely savers will not see any change to their interest rates so will continue to enjoy the relatively high savings rates of recent history.

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