Bank of England holds interest rates at 5.25% and says plan is ‘working’ to curb inflation

2 November 2023, 12:21 | Updated: 2 November 2023, 12:24

The Bank of England has held the base interest rate at 5.25%
The Bank of England has held the base interest rate at 5.25%. Picture: Alamy

By Asher McShane

The Bank of England has held the base interest rate at 5.25%, the second time in a row the rate has been held.

Listen to this article

Loading audio...

Since the end of 2021, the Bank had made 14 consecutive interest rate rises as it tried to keep inflation in check.

Six members of the nine-person Monetary Policy Committee voted to keep the Bank of England's base interest rate unchanged at 5.25%, but three voted to raise it to 5.5%.

Those who voted for no-change warned that current projections "indicated that a restrictive monetary policy stance was likely to be warranted for an extended period of time," in order to bring inflation back to the 2% target level.

The 6-3 decision was less close than the 5-4 decision to hold rates unchanged at the last MPC meeting in September.

Governor Andrew Bailey said: "Higher interest rates are working and inflation is falling. But we need to see inflation continuing to fall all the way to our 2% target.

"We've held rates unchanged this month, but we'll be watching closely to see if further rate increases are needed. It's much too early to be thinking about rate cuts."

The Bank of England's forecast shows that the Government is likely to meet its target to halve inflation by the end of this year, but it will take longer to return to the 2% target than previously thought.

The Bank said that Consumer Prices Index (CPI) inflation is likely to be around 4.6% in the fourth quarter, down from its previous 4.9% forecast. The Chancellor had promised to get inflation to 5.4% by the fourth quarter.

Officials had previously thought that inflation would return to the 2% target by the second quarter of 2025. But they revised that forecast on Thursday to say that inflation will remain above 2% until the final quarter of 2025.

The Bank expects gross domestic product (GDP) growth to flatline for four consecutive quarters from March next year in a downbeat forecast for the UK economy.

The Monetary Policy Committee (MPC) said that it thinks growth will be 0.6% in each of the last two quarters of 2023 compared to a year earlier and then fall to 0.2% in the first quarter of 2024.

Growth will then drop to 0.0% in the second quarter of next year and stay there until the second quarter of 2025.

The forecast is based on the Bank starting to reduce interest rates in the latter half of next year.

More Latest News

See more More Latest News

Gemma Southall, 38, last seen in Norwich on Saturday.

Police launch urgent hunt for woman, 38, last seen in pink vest and flip flops missing since Saturday

Dame Judi Dench played M in several James Bond films

Who is Blaise Metreweli - the real life M and first female head of MI6?

Exclusive
Economic Secretary to the Treasury Emma Reynolds was flummoxed by questions about the Lower Thames crossing

Treasury minister unable to answer basic questions on £10bn Thames crossing in car crash LBC interview

Belinda Taylor, left, and Adam Harrison, right, died during a tandem jump on Friday.

Tributes pour in for 'selfless' mother-of-four and 'wonderful' skydiving instructor who died during tandem jump

An Air India flight takes off.

Air India Boeing 787-8 Dreamliner flight forced to turn back with 'technical issue'

NATO Scramble RAF Typhoons Four Times In Seven Days To Intercept Russian Aircraft

RAF fighter jets scrambled six days in a row as fifteen Russian military aircraft intercepted

J.J. Spaun holds the U.S. Open trophy

JJ Spaun hails 'fairytale' victory as Robert MacIntyre’s US Open dream crushed

The trilateral Aukus partnership, believed to be aimed at countering China, involves building a new fleet of nuclear-powered attack submarines and co-operating in other areas of defence

Starmer has 'no doubt' Trump will back Aukus submarine deal despite ‘America First’ review

Falmouth youth fights for Transgender rights as Section 35 enacted repealing a Scottish Bill that would benefit the transgender community

Nearly 10,000 gender certificates granted as Gen Z applications soar

Israeli security personnel and first responders inspect an area hit by an Iranian missile strike on central Tel Aviv.

Israel-Iran LIVE: At least five dead and 287 injured in latest strikes on Tel Aviv as fighting enters its fourth day

Seven men who groomed two vulnerable teenage girls in Rochdale were found guilty of multiple offences last week

Starmer calls in 'Britain's FBI' to investigate grooming gangs after U-turn on national inquiry

Vance Boelter, 57, is suspected of fatally shooting the Democratic state representative Melissa Hortman and her husband, Mark

Man suspected of shooting Minnesota politicians in 'targeted assassination' arrested after two-day manhunt

Firefighters work to extinguish a blaze after a missile launched from Iran struck Haifa, in northern Israel, on Sunday, June 15, 2025. (AP Photo/Rami Shlush)

UK warns against all travel to Israel as missile strikes continue into third night

Sources told US media that Israel had briefed the Trump administration on a covert operation to target Iran’s top political figure

Donald Trump rejected Israeli plan to kill Iran’s Khamenei amid spiralling Middle East tensions

A third of children’s sunglasses bought from online marketplaces including Amazon, AliExpress, Ebay and Temu do not provide the required protection and are unsafe, according to a Which? investigation.

Third of sunglasses sold online pose risk to children’s eyesight, Which? says

Belinda Taylor died in a skydiving accident

Family demand answers after ‘selfless’ woman dies in 'tragic' skydiving accident