Interest rate held at 5%

The Bank of England’s Monetary Policy Committee (MPC) has voted to keep interest rates at 5%.

The MPC voted 8-1 to maintain the rate. One member preferred to reduce Bank Rate by 0.25 percentage points, to 4.75%

The move comes the day after it was revealed that the rate of inflation was stuck at 2.2%.

The 5% rate will remain for at least another month as the next MPC review isn’t due until November 7.

Mike Randall, CEO at Simply Asset Finance, said: “Businesses were hoping for a much needed shot in the arm and have been left disappointed. There remains a huge appetite among UK SMEs to capitalise on pent-up growth and invest in their future. But with economic challenges persisting and business costs are still high, they need more help. All eyes are on the Budget.

“With 5.6 million SMEs forming the economy’s backbone, a concerted effort is required to solve the multiple growth and productivity challenges across the sectors, with businesses needing better incentives, support, and skills to create a robust and sustainable future. The Chancellor’s speech offers a huge opportunity to bolster SME growth and investment – and it’s one she must seize with both hands.”

Yesterday, the US central bank, the Federal Reserve, brought interest rates down by 0.5 percentage points to 4.75% to 5%, among fears that the world’s largest economy is on the verge of a downturn. It was the first cut in four years.