The Bank of England has held interest rates at 5.25% for the seventh time in a row
Despite inflation hitting the central bank's target level of 2% for the first time in three years, the rates - currently at a 16-year high - have not been cut
The Bank's decision comes in the run up to the general election, with policies for the future of the UK economy a key battleground for political parties
The BoE is the UK’s central bank and it is independent from the government
We are coming to the end of our coverage of the Bank of England's decision to hold interest rates at 5.25%.
As we have been reporting, the decision was a close-run thing and the bank has opened the door to cutting interest rates in August. That would be the first drop in borrowing costs for more than four years.
You can read more from economics editor Faisal Islam and business reporter Dearbail Jordan here.
Dearbail Jordan
Business reporter
Image source, Getty ImagesThe biscuits at the Bank of England aren't what they used to be.
One of the perks about being locked in the Bank's basement to write about the interest rate decision is - or was - a decent choice of biccies to fuel all the typing.
There used to be various chocolate-covered treats but that has steadily dwindled so that now the only biscuits on offer are those wrapped in crinkly plastic that you'd find in a corporate travel tavern.
I've been told that the biscuits served to us hacks are exactly the same that Bank of England governor Andrew Bailey gets.
But that's no excuse.
As one brave journalist suggested today: "What about Jammie Dodgers?"
It's the very least we deserve.
As we've been saying throughout this page, inflation has now fallen to the Bank of England's target of 2% - that means in the year to May 2024 prices in the UK rose by 2%. That's the lowest rate in almost three years.
Remember inflation is the increase in the price of something over time - with the main inflation measure being the Consumer Prices Index.
A lower inflation rate doesn't mean prices are falling - it means they are rising less quickly.
Head to our explainer page to find out more.
Mitch Labiak
Live business reporter
Interest rates have a complicated relationship with the housing market, something Mark Walmsley knows all too well.
The estate agent from Coventry says there is a lag between every interest rate rise and the impact on the market because many people already have mortgage offers in place at a lower rate.
“Once those mortgages were over, that’s when the real impact started happening,” he said about previous rises, adding that this led to property viewings falling sharply.
However, although higher interest rates usually lead to higher mortgage costs, they can also put those buyers who are able to afford a deposit and the monthly repayments in a stronger negotiating position.
“Previously, if they wanted a house and it was a popular property, they would have been in massive competition with five or six other buyers and the price would rise.”
During the last interest rate announcement, in March, we heard a little more from the Bank of England directly.
Faisal Islam, our economics editor, explains to BBC Radio 4's World at One that there's been a "blackout" regarding public statements due to the general election period.
It means that we don't have any insight into the nine-member committee and their decision-making.
However, you can see get some information in their monetary policy summary here., external
A reminder that the next decision is due on 1 August.
High interest rates have also driven up rents over the last few years, says Graeme Moorhouse, a mortgage broker from Coventry.
Many first-time buyers rent, he says, but now many of them are moving back in with their parents "because they see that as the only way to save for a house".
He says many feel that they have "lost their freedom" because the only way they can afford a deposit is by cutting out £1,000 of rent a month.
"Ultimately that's not something that someone who is 34 - that's the average first-time buyer - wants to do."
He adds that while interest rates have risen making mortgages more expensive, house prices haven't really come down by much.
Susan Allen, chief executive of Yorkshire Building Society, says there is likely to be a boost in homebuying when uncertainty around the general election fades.
She says saving for a deposit remains one of the biggest hurdles for first-time buyers due to the impact of high rents – especially as the average price of a property is now around “eight to ten times” more than a salary.
However, more mortgage providers are offering longer loan terms for first-time buyers. And high interest rates mean savers earn more on their savings (although many people are yet to open high interest accounts, she says).
“We have seen balances move from current accounts into savings accounts in all the major bank reports over the last eight, nine months,” Ms Allen says.
Here are some pointers if debt is something you are worried about.
Tackling It Together: More tips to help you manage debt
The Money Advice Trust says the Bank of England’s decision to hold interest rates again at 5.25% will leave many households under strain.
The charity, which provides free advice on debt problems, says many homeowners are already struggling with significantly higher mortgage repayments.
"For those nearing the end of fixed-rate deals this year, the challenges are far from over," says Jane Tully, its director of external affairs.
“I’d encourage anyone facing difficulties paying their mortgage to reach out to their lender for support – they can offer more support than many people think."
The Bank of England's decision to hold interest rates today could be good news for homebuyers, suggests Matt Smith, a mortgage expert at property website Rightmove.
"While many will have hoped for a surprise cut today, a hold was expected by the market - and therefore, this certainty could still lead to mortgage rates trickling down rather than up over the next few weeks, which is really what home-movers are after."
Hina Bhudia, a partner at Knight Frank Finance, thinks it may take a little longer, though.
Deals for two- and five-year fixed rate mortgages are likely to remain flat at about 4.5% and 4.8% respectively - but she says "sentiment will turn quickly when the first rate cut comes into view".
"The lenders generally are behind on their targets and we’d expect to see real competition for market share once they have some leeway to begin cutting rates again.”
Image source, PA Media
Image source, Aaron Chown/PA WireThe Bank of England is the UK's central bank, and its main responsibility is to keep the country's financial system safe, stable and resilient.
One of the key tasks it has is to keep inflation - the official measure of how quickly prices are rising - at 2%.
Over the last few years, inflation has been above that target, and one of the Bank's traditional methods to combat this is to raise interest rates.
That decision on interest rates is decided by the Bank's Monetary Policy Committee, which meets eight times a year.
The committee's nine members - five appointed by the Bank, and four by the chancellor - then vote on whether to increase, reduce or hold interest rates.
For more on the Bank of England and how it affects interest rates, click here.
Peter Ruddick
Business reporter
I'm in Wolverhampton for Radio 5 Live's election coverage and I've just got some reaction from local mortgage adviser Ben Perks.
His instant verdict on the Bank's decision to hold rates at a 16-year high? "Not surprised. Definitely disappointed. Certainly frustrated."
"They've decided to tread water and do very little," he told me. "It's OK saying 'oh, we'll wait but the reality is that 125,000 people a month are coming to the end of their fixed rates which over a two-month period is the population of Wolverhampton city centre."
Ben says he's had borrowers in tears in his office when they've found out how much higher their mortgage repayments are going to go.
"It is extremely stressful. We've had meetings when you tell them the new payments and with the fact everything else has gone up they don't know which way to turn." A reminder that even a decision to do nothing has a financial impact on many people.
Responding to the latest interest rate decision, Federation of Small Businesses national chair Martin McTague tells PA Media: "Yet again, the MPC has opted to stick instead of twist, a move which was widely predicted but which is no less disappointing for it.
"The high plateau rates are currently stuck at is now undermining growth as small firms struggle to access affordable finance to help them expand."
He adds: "Inflation is now back on target and holding off a cut in the base rate until a future date risks snuffing out tentative signs of a recovery in GDP, with the flat growth in April a warning sign."
On Wednesday, markets had begun to rule out a summer rate cut. But Yael Selfin, chief economist at KPMG UK, says one "is still on the table" after today's interest rate decision by the Bank of England.
“We continue to expect the first rate cut in August, once the general election is over as inflationary pressures continue to ebb," she says.
However, anyone hoping that rates will return to the rock bottom levels of a few years ago may be disappointed.
Even when the rate is cut it is likely to "remain restrictive" for some time to keep inflation in check, Ms Selfin says, pointing to previous comments by Bank officials.
The committee says the timing of the upcoming general election - in just two weeks' time - was "not relevant" to its decision to hold interest rates at 5.25%.
In the official minutes for their meeting, it says the decision was "made on the basis of what was judged necessary to achieve the 2% inflation target".
The Bank of England - and its decision on interest rates - is independent from the government.
Daniel Thomas
Business reporter, BBC News
We're getting more details now about why the Bank of England (BoE) decided to hold interest rates at 5.25% on Thursday for the eighth consecutive meeting.
The central bank's monetary policy committee (MPC) voted by a majority of seven to two to keep rates unchanged.Members Dave Ramsden and Swati Dhingra voted to cut rates by 0.25 percentage points.
In a sign the central bank may be getting closer to cutting rates, the BoE policy minutes said the decision had been "finely balanced".
For some MPC members, persistently high inflation in the services sector and faster-than-expected wage growth reinforced their view that it was too soon to cut rates.
But others felt these issues were moderating and were one-offs, unlikely to have a major upward effect on future inflation.
Yesterday markets were betting against a rate cut in August but today's decision suggests one may still be on the cards.
Faisal Islam
Economics editor
A June hold as expected, and indeed not even a change in the number of votes for a cut - just two out of the nine-member committee. But it was a close-run thing.
Buried in the minutes of the committee there were signals of a significant change in tone, and a building majority for a cut on 1 August.
This is new news, especially because members of the interest rate-setting committee have been in a general election media blackout.
The seven members who voted for a hold are now split between hawks and doves. The latter believe that the decision even this month was “finely balanced”.
Crucially they are playing down signs from the data that service sector inflation still looks sticky, suggesting it reflects one-off factors such as the rise in the national living wage and bills that automatically rise by inflation, such as broadband and mobile.
So this group, which appears to include the key Bank of England leadership, is playing down the strength of underlying inflationary pressures.
This would be enough for a majority to cut rates, although this was the last meeting for deputy governor Ben Broadbent, who will be replaced by Clare Lombardelli in August.
While not a done deal, this language shows a clear signal to the markets and the public that after the Bank completes its new forecasts for the economy, a cut is now the most likely outcome at its next rates meeting in August.
Dearbail Jordan
Business reporter
The Bank of England has opened the door to cutting interest rates in August in what would be the first drop in borrowing costs for more than four years.
On Thursday, the Bank voted to hold interest rates at 5.25% in a decision that was widely expected.
Earlier this week, figures revealed that inflation – which measures the pace of price rises – had slowed to 2% in May which is in line with the Bank of England’s target. There are risks that some areas of inflation remain high.
But minutes from a gathering of the Bank’s rate-setting committee show that when they meet again in August they will look whether these areas of concern are “receding”.
It said: “On that basis, the committee will keep under review for how long [the] bank rate should be maintained at its current level.”
If the Bank does go ahead with an interest rate cut in August, it would be the first one since March 2020 when the UK was heading into the first Covid lockdown.
Details from this month’s meeting showed that the majority of the Bank’s committee voted 7-2 to two to hold rates, but the result was not as cut and dried as it had been previously. For three members voting to hold this month was a “finely balanced” decision.
If they had have chosen to cut, there would have been a majority in favour of a reduction.
The Bank of England’s governor Andrew Bailey, said: “It’s good news that inflation has returned to our 2% target.
“We need to be sure that inflation will stay low and that’s why we’ve decided to hold rates at 5.25% for now.”
Katie Hope
BBC business reporter
Interest rates have been held at 5.25% and remain at their highest level for 16 years.
The Bank of England had been widely expected to keep rates unchanged despite a further slowdown in inflation.
It is the seventh time in a row that interest rates have been left unchanged.
On Wednesday, data showed that overall inflation in May eased to 2%, which is the Bank of England's target.
UK interest rates have been left unchanged at 5.25% by the Bank of England.
The Bank has held rates at 5.25% for the seventh time, in an effort to combat inflation, leading to higher mortgage repayments but also higher savings rates.
Stay with us as our team of correspondents bring you fresh analysis and feedback on this news.