The Bank of England is set to maintain its base rate at 4.5% when its Monetary Policy Committee (MPC) announces its latest decision on Thursday, as policymakers weigh inflation risks against economic growth.
With inflation rising to 3% in January, analysts predict the Bank will take a cautious approach, despite market expectations of two further rate cuts by the end of 2025. The decision will have widespread implications for households, businesses, and investors, affecting everything from mortgage rates to borrowing costs.
The MPC, chaired by Bank of England governor Andrew Bailey, meets eight times a year to set interest rates with the aim of keeping inflation at the government’s 2% target. Its decisions significantly influence the cost of borrowing, including mortgages, business loans, and credit cards, while also impacting savings returns.
Although the Bank has already made three rate cuts since August 2024—bringing the base rate to its lowest level in 18 months—officials have warned of lingering inflationary pressures and global economic uncertainty.
“Bank of England policymakers have been warning on inflation and lingering uncertainty, so further rate cutting relief for homeowners looks to be an unlikely outcome from this month’s meeting,” said Paul Heywood, chief data and analytics officer at credit agency Equifax UK.
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