UK interest rates held at 5.25%

The Bank of England has kept interest rates on hold for the sixth time in a row, but signalled that cuts are on the way.

The nine-member Monetary Policy Committee voted 7-2 to maintain the base rate at 5.25%, with two members of the committee voting for lower borrowing costs.

Rates are currently at the highest level for 16 years in a bid to bring down high inflation. Although inflation has been falling, it remains above the Bank’s target of 2%.

Commenting after the latest decision was announced, Andrew Bailey, governor of the Bank of England, said he was “optimistic that things are moving in the right direction”.

The Bank expects inflation to fall “close” to its 2% target in the next couple of months.

“We need to see more evidence that inflation will stay low before we can cut interest rates,” Bailey added.

Most economists expect the first interest rate cut to be announced in the coming months.

The next decision is due on 20 June.