Interest rates in the UK are set to be held at 4% as inflation remains ‘uncomfortably high’, according to experts. Economists are expecting the Bank of England to keep rates unchanged on Thursday when they announce them.

It comes after the rate of Consumer Prices Index (CPI) inflation was unchanged at 3.8% in August, remaining at the highest level since the beginning of 2024, new official data has shown.

Food and drink inflation also rose to 5.1% last month, from 4.9% in July, marking the fifth month in a row that the rate has accelerated.

Monica George Michail, associate economist for the National Institute of Economic and Social Research (NIESR), said the MPC is likely to be cautious about further rate cuts.

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