The Bank of England has left interest rates unchanged at 5.25% despite the UK entering recession at the end of last year and a steep fall in inflation over recent months.
In a widely expected decision, the central bank’s monetary policy committee (MPC) held rates for a fifth consecutive time, judging that it needed to wait until inflation fell closer to its 2% target before bringing down the cost of borrowing.
The headline rate of annual inflation fell to 3.4% in February from 4% and is on course to fall to about 2% in April.
Wages growth has remained strong in several sectors of the economy, adding to the concerns of MPC members who fear that price rises could accelerate again without interest rates remaining high for a sustained period.
Workers’ pay rose by 5.5% on average for the year to February 2024, according to the latest official figures.
More details to follow …