In what has been described by experts as a ‘surprise move’, the Bank of England has announced that it will leave current interest rates unchanged. While it had been expected for the Bank to raise the base rate from 5.25% to 5.5%, the 5.25% rate was held.

When commenting on this, Bank of England governor, Andrew Bailey, said: “Inflation has fallen a lot in recent months, and we think it will continue to do so.”

The chancellor, Jeremy Hunt, further noted that the UK was “starting to see the tide turn against high inflation”.

ACCA UK strategic engagement lead, Gemma Gathercole, further commented: “Our members and the businesses they support will welcome the Bank’s decision to hold interest rates at their current level. 

“Our members tell us that despite the recent reduction in the rate of inflation, they are still seeing negative impacts on businesses and a hold on investment, which puts the brakes on potential UK growth. Government needs to work with the Bank of England to do more to encourage businesses to invest and grow.”

ACCA UK chief economist, Jonathan Ashworth, concluded: “Our recent, better than expected inflation data made the decision a close call, but it is still a bit of a surprise that the Monetary Policy Committee sat on their hands.

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“The committee was split, with five members voting to keep rates on hold, and four opting for a quarter point hike. Signs of loosening in the labour market and deteriorating growth, as well as some positive developments on the inflation front, persuaded the majority to remain on hold.

“In my opinion, the risk remains that some further monetary tightening may still be needed in the future.”