The Bank of England has warned in opposition to complacency after freezing its rate of interest at 5.25%.
Governor Andrew Bailey stated he's decided to carry inflation again right down to the goal degree of two% - however with present charges at 6.7%, he added that "the job isn't done yet".
And amid hypothesis the Bank's base price might now be near peaking, he warned: "I can tell you we have not had any discussion on the Monetary Policy Committee about reducing rates because that would be very, very premature."
Reaction to BoE's decision - latest updates
The determination to leave the interest rate unchanged got here a day after inflation unexpectedly fell - ending the longest successive interval of "tightening".
Before now, the Bank had raised charges 14 instances in a row - and the final time they had been left unchanged was in November 2021.
The Monetary Policy Committee's newest vote was a slim one - and whereas 5 members had voted in favour of a freeze, 4 had felt charges ought to rise additional to five.5%.
On Wednesday, the US Federal Reserve had also opted to hold its interest rate steady - however crucially, each central banks are reserving the appropriate to implement additional hikes sooner or later.
As the City of London digested the BoE's determination, the pound fell to its lowest degree since March - with British shares outperforming the broader market.
@EdConwaySky
It is arguably probably the most thrilling non-event in current financial historical past.
Today, for the primary time since late 2021, the Bank of England voted to go away borrowing prices unchanged.
Now in some senses, that is certainly a non-event. Interest charges are not any greater than they had been yesterday, however the price of borrowing stays painfully excessive for a lot of households.
Those resulting from refinance their mortgages within the coming months will nonetheless see a pointy enhance of their charges in contrast with two or 5 years in the past. The value of dwelling disaster continues to be with us.
Read Ed's full analysis here.
Ultimately, analysts are warning that householders - already grappling with surging mortgage prices - may not be out of the woods but.
Santander's UK chief economist Frances Haque stated: "The question now is firmly centred on whether this pause will remain or if another rate rise will be needed in November, only time and further economic data will tell."
Despite Governor Bailey expressing warning, Samuel Tombs of Pantheon Macroeconomics believes the Bank "probably is done" mountaineering for now - and 5.25% will signify the height on this cycle.
And in terms of when the rate of interest will begin being minimize, ING economist James Smith predicted that reductions might start in the midst of subsequent 12 months.
"Ultimately the UK economy can't sustain rates above 5% indefinitely, and we think something closer to 3% is a more likely medium-term level," he defined.
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