UK interest rates live: experts expect MPC to hold rates
The Bank of England’s Monetary Policy Committee (MPC) meets today to decide UK interest rates. The last meeting resulted in a cut, but experts think there is little chance of interest rates falling today.
December’s cut was the latest in a gradual cycle of interest rate cuts that have seen UK base rate fall to 3.75%, from 5% in August 2024.
The steep rise in interest rates from January 2022 onwards reflects the Bank of England’s attempt to control inflation, which spiked in the wake of Russia’s invasion of Ukraine.
Throughout the recent cutting cycle, the MPC has never cut UK interest rates in two consecutive meetings. It isn’t expected to change that approach today.
When does the MPC announce UK interest rates?
The MPC’s decision will be announced today at 12pm.
We’ll bring you the result as it lands. Stay tuned!
December’s inflation uptick makes a hold more likely
Inflation is arguably the most influential factor on MPC interest rate decisions. The Bank of England has a remit to keep inflation around 2%, and interest rate changes are the key lever it uses to achieve this.
Higher interest rates have the effect of limiting consumers’ disposable income. That, in theory, reduces demand across the economy, which has a dampening effect on inflation.
The latest bout of inflation appears to have peaked at 3.8% between July and September. It had been coming down faster than expected in the meantime, which helped the MPC justify a rate cut in December.
But last month’s inflation reading (covering December) showed a rise in inflation to 3.4%. While widely expected, this will likely discourage the MPC from making a second successive cut – something it hasn’t done since the first quarter of 2020, when the Covid pandemic looked set to collapse the economy.
"We expect the UK’s disinflationary trend to continue through 2026, with slack in the labour market steadily increasing,” said Grant Slade, economist at investment research firm Morningstar. “However, the Bank of England is likely to hold rates this month as it waits for further evidence that wage growth and broader price pressures are softening.”
Good morning, and welcome to live coverage of today’s UK interest rate meeting at the Bank of England.
Experts overwhelmingly expect the Monetary Policy Committee (MPC) to hold rates at 3.75% today. Will we see a deviation from this prediction? It would come as something of a shock if so.
Whatever happens, stick with us here as we bring you live preview in the run-up to the decision, as well as reaction in its aftermath.
