The members of the monetary policy committee (MPC) voted six to three in favour of keeping the base rate at 5.25%, in line with the same hold decision by the US Federal Reserve and European Central Bank earlier this week.

More worryingly, the Bank indicated that it expects interest rates to remain at 5.25% for at least seven months with no cut predicted until Q3 2024. It added that there would only be gradual cuts until the end of 2026, when rates are expected to be 4.25%. ‘Further tightening in monetary policy would be required if there were evidence of more persistent inflationary pressures,’ it warned.

The latest projections ‘indicate that monetary policy is likely to need to be restrictive for an extended period of time’, with interest rates running at current rates well into 2024.

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