The Bank’s Monetary Policy Committee (MPC) is widely expected to keep the base rate unchanged at its meeting on Thursday, following a cut from 4.25% in August. This decision offers little relief for mortgage holders, millions of whom face refinancing onto higher rates in the coming years.

The cautious stance is driven by conflicting economic data. While the labour market is showing signs of weakening, Consumer Prices Index (CPI) inflation rose to 3.8% in July, up from 3.6% in June and significantly above the Bank’s 2% target. This rise was largely attributed to increasing food and drink prices, while wage inflation has remained high at 5%.

Analysts suggest that further rate cuts in November and December are now unlikely, with some forecasting that the next reduction may not occur until February. Philip Shaw of Investec and Thomas Pugh of RSM UK are among those predicting a hold this week, citing the MPC’s need to balance inflationary pressures with economic fragility. Economists at Pantheon Macroeconomics noted that recent comments from Governor Andrew Bailey suggest he is comfortable with financial markets pricing in only a 40% chance of another rate cut this year, reinforcing expectations that rates will remain on hold for the foreseeable future.