Bank of England holds interest rates and says inflation has ‘peaked’

The Bank of England has held interest rates at 4% despite policymakers stating they believe inflation has “peaked”.

In a tight vote, the central bank’s Monetary Policy Committee (MPC) opted to keep the rate the same for the second consecutive time in its final meeting before the autumn Budget.

Members of the nine-strong committee voted five to four in favour of maintaining the rate, which is used to dictate mortgage rates and other borrowing costs, but pointed to a “gradual” easing of rates in the longer term.

The Bank suggested that inflation peaked in September, at 3.8%, and is expected dip over the coming months before settling at the 2% target rate in 2027.

It had previously predicted that inflation would peak at 4%.

Andrew Bailey, governor of the Bank of England, said: “We held i