Interest rates on hold but further rise coming

The Bank of England has kept interest rates on hold at 0.75 per cent after August’s hike, but it confirmed that further increases were likely to be needed to rein in inflation.

Members of the Bank’s nine-strong Monetary Policy Committee (MPC) voted unanimously yesterday to keep rates unchanged, having backed a quarter-point rise last month – only the second increase since the financial crisis.

The bank said economic growth was on course to beat expectations for the third quarter thanks to a bumper July, but it cautioned over “greater uncertainty” on Brexit.

In minutes from the latest rates meeting, the bank revealed its internal estimates showed economic growth was set to pick up pace to around 0.5 per cent in the third quarter, from 0.4 per cent between April and June.

It had previously predicted growth would remain steady at 0.4 per cent in the third quarter.

Official figures on Monday showed the UK economy enjoyed a growth spurt in July.