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Bank of England Live: Bailey refuses to confirm if Budget influenced rates decision

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The Bank of England is expected to hold interest rates at four per cent due to stubbornly high inflation.
The Bank of England faces a challenge in managing inflation.

Welcome back to the Morning Wire liveblog.

Andrew Bailey has refused to confirm whether the upcoming Budget and Rachel Reeves’ recent comments influenced his decision on interest rates. 

The Bank of England has held interest rates at four per cent in its final decision before the Autumn Budget.

The Bank’s Monetary Policy Committee (MPC) voted 5-4 to hold interest rates as the Bank’s Governor, who made the deciding call at the latest meeting, said he would “prefer to wait” before backing further cuts. 

All attention was on Bailey ahead of the cut as analysts expected the Governor to have the deciding vote on a cut.

It’s another split decision for the Bank at 5-4 following on from the recent string of divisions amongst hawks and doves.

The Bank ditched “careful” from its policy guidance and said rates were on a “gradual path downwards”, with the minutes to the meeting highlighting that CPI inflation rate had “peaked” at a rate of 3.8 per cent. 

In an explanation for his policy decision, Bailey left the door open to voting for policy to be loosened in the coming months.

Some Bank officials expressed worry about elevated wage growth, with pay excluding bonuses rising 4.9 per cent in the three months to August. 

Ahead of the meeting Alan Taylor had suggested that keeping monetary policy too tight could be risky for the UK economy, stifling investment levels and damaging the jobs market. 

We’ll be bringing you the latest news following the rate decision as soon as we get it.

Here’s a summary of some of our top headlines from yesterday: