Bank of England keeps interest rates on hold

The Bank of England has left interest rates unchanged at 5.25% for the first time in nearly two years, in a surprise move which may signal the end of a cycle of increases which lasted nearly two years.

The decision comes a day after figures revealed an unexpected slowdown in UK price rises in August.

The Bank had previously raised rates 14 times in a row to tame inflation, leading to increases in mortgage payments but also higher savings rates.

Commenting on the decision, EPRA CEO Dominique Moerenhout asked for more clarity on likely policy directions. 'Signalling from the bank and economic leaders in advance of today led to much anticipation of a rate rise. The consensus from those we’ve been speaking to across Europe’s listed real estate industry is that investors, developers and their suppliers desperately need clearer indications from central banks on likely policy direction,' Moerenhout said. 'This greater clarity will help them shore up investor confidence and plan for the future.'

The announcement follows the decision a week ago by the European Central Bank (ECB) to hike interest rates again, taking the overall deposit rate to 4%. In a statement, the ECB said: 'Inflation continues to decline but is still expected to remain too high for too long.'

'The Governing Council is determined to ensure that inflation returns to its 2% medium-term target in a timely manner. In order to reinforce progress towards its target, the Governing Council today decided to raise the three key ECB interest rates by 25 basis points.'


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