Base Rate Held at 4% by the Bank of England
The Bank of England has kept the base rate steady at 4%. This decision impacts borrowers, savers, and the overall inflation control strategy.
What the Base Rate Means
The base rate is the interest rate set by the central bank, which other banks and lenders pay when borrowing money. It influences the rates borrowers pay and the returns savers receive. Additionally, it serves as a tool for managing inflation.
Inflation and the Bank's Target
The Bank aims for a 2% inflation target based on the Consumer Prices Index (CPI). Latest figures show CPI inflation at 3.8% for the 12 months up to September, unchanged from August but still above the target.
Monetary Policy Committee (MPC) Votes
- Five MPC members voted to hold the base rate at 4%.
- Four members preferred a cut to 3.75%.
"The risk from greater inflation persistence has become less pronounced recently, and the risk to medium-term inflation from weaker demand more apparent. But more evidence is needed on both."
Expert Commentary
Nicholas Mendes of broker John Charcol said: "The Bank of England has chosen patience. Inflation is falling faster than expected, wage growth easing, and the labour market clearly softening."
What This Means for Consumers
The current base rate level affects mortgage costs and savings returns, reflecting the Bank's cautious approach amid evolving economic conditions.
Summary: The Bank of England holds the base rate at 4%, balancing slower inflation and a softening labor market while awaiting more data before making changes.