At the latest meeting of the Monetary Policy Committee, the Bank of England left its policy interest rate unchanged – at 5.25% – the first time since November 2021 that the cost of borrowing wasn’t raised. The decision follows new data showing consumer price inflation for the year to August at 6.7%.
The rate of inflation in the UK fell from 6.8% for the year to July to 6.7% for the year to August. This positive news was followed by the Bank of England choosing not to hike interest rates for the first time since November 2021 – although the current policy rate remains at its highest level in 15 years. That decision, accompanied by the latest data on underlying inflation, raises the possibility that the current cycle of monetary tightening (interest rate rises) may have peaked.
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