Interest rate: Bank of England announces base rate will remain at 5.25% after unexpected fall in inflation
Analysts had predicted that the interest rate could jump to the highest level since February 2008 but after an unexpected fall in inflation, this outcome became less likely
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The Bank of England has today (21 September) announced that the interest rate level will remain at 5.25%.
The Monetary Policy Committee has been expected to increase the interest rate once again as the country continues to deal with the cost of living crisis. Experts predicted a rise from 5.25% to 5.5%. This would have been the highest base rate level since February 2008.
However, this outcome became less likely according to economists, after it was announced that the UK's inflation rate had actually decreased in August. In a surprise to many, the ONS confirmed that the August inflation rate had dropped from 6.8% to 6.7%, the lowest level in 18 months.
The Bank of England had previously predicted the inflation rate to increase to 7.1% throughout the month owing to rising fuel prices. However, counteracting this was lower hotel and air fare costs and a slowdown in food price rises.