Interest rates UK latest: Bank of England set to reveal next decision

The Bank of England’s rate-setters could take note of the European Central Bank’s (ECB) decision to cut interest rates in the Eurozone last week, marking the second reduction in a row.

The ECB’s rate-setting council lowered the main deposit rate from 3.75 per cent to 3.5 per cent at the meeting last week.

“Instead, the MPC will likely take this as a positive sign that underlying price pressures are easing, and could warrant a further dial down of restrictive policy in November, when it conducts its next forecast update,” he said.

“The MPC will also have more information on the fiscal outlook, with the autumn Budget slated for 30 October.”

Matt Swannell, chief economic adviser at the EY Item Club, said the Bank of England had“sent a clear message that back-to-back rate cuts were unlikely” after last month’s reduction, unless subsequent economic data was weaker than expected.

He said the latest official data, which showed Consumer Prices Index (CPI) inflation remained at 2.2 per cent in August, would not be enough to prompt the Bank to start cutting rates more quickly.

Hi and welcome to our blog covering the Bank of England’s latest decision on interest rates that will happen at midday. We will bring you all the latest on the decision as well as reaction from top economists and policymakers.

Annual house price growth has slowed, but private rents continue to climb at a “near-record rate”, according to an Office for National Statistics (ONS) report – as many hard-pressed borrowers know:

Savers are an estimated £4billion better off following improvements to easy-access rates in recent months, according to the City regulator.

The Financial Conduct Authority (FCA) said the average interest paid on easy-access savings accounts increased to 2.11% in June, up from 1.66% in July 2023, just before it published a review.

It said: “We estimate savers are £4 billion a year better off from higher interest rates as a result.”

A new consumer duty was introduced by the regulator last year, requiring financial firms to put consumers at the heart of what they do, including when designing products and communicating with customers.

In July 2023, the FCA also set out a 14-point action plan to ensure banks and building societies were passing on interest rate rises to savers appropriately, that they were communicating with customers more effectively and that they were offering them better savings rate deals.

The FCA said that while interest rates on savings accounts had been rising, this had been happening more slowly for easy-access accounts.

Examples of how everyday costs changed:

The Bank of England is expected hit the pause button on interest rate cuts after warning it needs to be “careful” not to rush the decision as pressures on inflation linger: