Wed, 17 Sep 2025

Wed, 17 Sep 2025 Interest rates expected to be held by Bank of England

The Bank rate was cut in August but many analysts do not expect any further reductions this year.
Interest rates are expected to remain at 4% when the Bank of England meets on Thursday, after being cut from 4.25% in August. Analysts predict a "clear-cut" decision with no further cuts this year due to high inflation rates. The current rate of inflation is 3.8%, above the target level of 2%. Cutting interest rates can control inflation by making borrowing more expensive, but it also harms the economy. As a result, policymakers are unlikely to cut the Bank rate despite inflation being above target. However, they expect inflation to drop soon, leaving open the possibility for further cuts in the future. Mortgage rates have dropped slightly since August's MPC meeting, but further moves are uncertain. Savers have seen their returns fall as interest rates decreased, with average easy access savings rates falling below 3%. The government is keen on seeing lower interest rates to boost economic growth, but is aware of the inflationary risk. Thursday's decision will come after the US central bank cut its rate and the European Central Bank held its interest rate steady.
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