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UK interest rates left unchanged in surprise move

21.09.23 15:21

UK interest rates have been left unchanged at 5.25% by the Bank of England in a surprise move.

The decision comes a day after figures revealed an unexpected slowdown in UK price rises in August.

The Bank had previously raised rates 14 times in a row to tame inflation, leading to increases in mortgage payments but also higher savings rates.

But the Bank of England said inflation - the rate at which prices rise - was falling faster than expected.

"Inflation has fallen a lot in recent months, and we think it will continue to do so," said Bank of England Governor Andrew Bailey.

"But there is no room for complacency. We need to be sure inflation returns to normal and we continue to take the decisions necessary to do just that."

The Bank has been hiking rates since December 2021 in an effort to tackle inflation in the UK, which is much higher than usual and putting households under financial pressure.

However, the latest move to hold rates raises the prospect that this cycle of increases may have peaked.

The decision to keep rates on hold by the Bank was a close one. The nine policymakers on the Bank's Monetary Policy Committee (MPC) voted 5-4 in favour of no change, BBC reports.