The Bank of England has kept the Bank Rate at 4%. The Monetary Policy Committee voted to hold after its 0.25 percentage point cut in August. The decision comes as the MPC remains cautious about lowering borrowing costs until there is clearer evidence that inflation pressures are easing.

Governor Andrew Bailey said inflation is not yet back to the 2% target and any future reductions will be gradual and careful. “Although we expect inflation to return to our 2% target, we’re not out of the woods yet so any future cuts will need to be made gradually and carefully.”

Official data show CPI inflation stayed at 3.8% in August, the highest since early 2024 and above the Bank’s 2% target. Food and drink inflation rose to 5.1%, the fifth month in a row of increases. The MPC said higher commodity prices globally and in the UK have driven much of the rise, with beef, cocoa beans and coffee cited. It added that labour costs and costs linked to new packaging regulation had also contributed to higher food prices.