Falling inflation gives Bank of England pause for thought

The Bank of England decided against raising interest rates in September, voting by a narrow majority to keep the policy rate unchanged at 5.25%. This marked the first time that interest rates have not risen since December 2021. Although CPI inflation remains well above the Bank’s target, several measures of price pressures cooled more quickly than had been expected in August. Inflation remains on course to fall over the rest of the year, but further rate rises cannot be ruled out just yet, particularly if pay growth manages to sustain its historic pace.

Tightening cycle put on pause as inflation delivers rare downside surprise

The Bank of England’s Monetary Policy Committee (MPC) voted to leave interest rates unchanged in September, holding Bank Rate at 5.25%. In doing so, the MPC halted (at least for now) a tightening cycle that stretches back almost two years.

This followed the news that annual CPI inflation had nudged down to 6.7% in August (f