Bank of England policymakers have left interest rates unchanged at 3.75%, but indicated that lower inflation as a result of cost-of-living measures in Rachel Reeves’s budget should pave the way for cuts in the months ahead. The nine-member monetary policy committee (MPC) voted to leave borrowing costs on hold, despite forecasting weaker growth and lower inflation than at its last quarterly forecast in November. Andrew Bailey, the Bank’s governor, who voted to hold rates, said: “We now think that inflation will fall back to about 2% by the spring. We need to make sure inflation stays there, so we’ve held rates unchanged at 3.75% today. Reeves, the chancellor, announced a package of anti-inflation measures in her late November budget that she hoped would pave the way for more rate cuts.

Source: The Guardian February 05, 2026 19:32 UTC