A need to ensure inflation is close to its peak persuaded the Bank of England to keep interest rates unchanged at 4%.
Two of the nine-member committee voted for a 0.25 percentage point cut but the majority felt a need to monitor any lingering inflationary pressures.
The committee also voted by a majority of 7–2 to reduce the stock of UK government bond purchases held for monetary policy purposes.
The Bank of England thinks inflation will peak at 4% in September, which will be double its target of keeping it at 2%.
Analysts are assessing whether the next cut in interest rates will come before the end of the year.
Jeremy Batstone-Carr, European Strategist at Raymond James Investment Services, said: “With the looming potential uncertainty created by the Autumn Budget, scheduled for 26 November, the sixth rate cut in the current cycle could still be some months away.”
Isaac Stell, Investment Manager at Wealth Club said: “The real action may lie not with the Bank, but with Westminster.
“The BoE remains sat on the sidelines, waiting to see what tax and spending decisions emerge in the budget.
“Moves prior to this could backfire and the Bank likely wants to see to see whether the government manages to navigate the budgetary gauntlet before making its next play.”
Official figures published today show how there was an appetite for tax-free saving when interest rates were higher.
In 2023-24, an extra 2.6 million people saved or invested money in Individual Savings Accounts (Isas), according to new data from HM Revenue and Customs (HMRC).
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