BoE keeps rates unchanged for first time in nearly two years

The Bank of England has brought the most aggressive cycle of interest-rate rises in more than three decades to a close amid falling inflation and mounting fears of recession.

The central bank held its key rate at 5.25%, ending 14 successive hikes since December 2021, when rates were just 0.1%. Five members of the Monetary Policy Committee voted to leave rates unchanged and four wanted to raise them to 5.5%. Governor Andrew Bailey, who had casting vote, chose to hold.

Markets were split before the vote, betting on a roughly 50% chance of a vote to hold, after a surprise fall in August inflation to 6.7% this week.

Investors still expect one more quarter-point increase but Goldman Sachs and Nomura reckon rates have peaked.