Bank of England holds interest rates as UK ‘not out of the woods’

The Bank of England has held interest rates at 4%, warning the UK is “not out of the woods” as inflation is rising and taxes is leading to soaring food prices.

Governor Andrew Bailey said, “Although we expect inflation to return to our 2% target, we’re not out of the woods yet so any future cuts will need to be made gradually and carefully.”

Jonathan Andrew, CEO of Bibby Financial Services said, “Today’s Bank of England decision to hold interest rates at 4% comes as little surprise, given yesterday’s announcement that inflation remains significantly higher than the Bank’s target.

“With the ONS forecasting weak GDP growth and the tightening of the labour market, it feels unlikely that interest rates will fall this side of the New Year.

“While UK SMEs are demonstrating resilience in the face of difficult trading conditions, economic challenges continue to apply further pressure.

“The Chancellor has a critical opportunity in the Autumn Budget to prove that SMEs remain at the centre of the government’s growth strategy.  What that looks like is simpler taxes and greater incentives to help small businesses not only survive, but flourish.”