‘Much, much too early’ to talk about interest rate cuts, warns Bank of England governor

The Bank of England has warned against complacency after its interest rate was frozen at 5.25%.

Governor Andrew Bailey said he is determined to bring inflation back to the 2% target level – but with current rates at 6.7%, he added “the job is not done yet”.

And amid speculation that the Bank’s base rate could now be close to peaking, he warned: “I can tell you that we have not had any discussion in the Monetary Policy Committee about cutting rates because that would be very, very too early.”

The decision to leave the interest rate unchanged came the day after inflation unexpectedly fell more than expected – ending the longest consecutive period of “austerity”.

Before now, the bank had raised interest rates 14 times in a row – and the last time they were kept unchanged was in November 2021.

The Monetary Policy Committee’s latest vote was narrow – and while five members had voted for a freeze, four had felt that interest rates should rise further.

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