LIVE: Bank of England announces it will NOT increase interest rate following surprise inflation drop

The Bank of England has decided to keep interest rates unchanged for the first time in almost two years.

In a close decision, policymakers said they had opted to keep the base rate, which influences how much families need to pay to borrow money, at 5.25%. They also downgraded the outlook for the economy.

Officials still left the door open to further rises in the future, promising to “take the decisions necessary” to return inflation to normal levels.

It is the first time since November 2021 that the Monetary Policy Committee (MPC) has met without deciding to raise interest rates. Since then, the base rate was increased in 14 consecutive meetings, taking it from 0.1% to 5.25% as the Bank attempted to put a lid on runaway inflation.

Many had expected this week’s meeting to bring the 15th straight rise, and it almost did. Four of the nine-person MPC voted to raise rates to 5.5%.

It comes after inflation hit 6.7% in August, down from 6.8% in July, and significantly lower than the 7.1% that had been expected.

Read below to stay updated on today's interest rate announcement...

Shadow Chancellor Rachel Reeves said that despite today's announcement, inflation remains high. She also highlighted that households coming off fixed-rate mortgages will be worse off due to the Conservatives 'disastrous' mini-budget.

She added:

“Britain has been left worse off after 13 years of economic chaos and instability under the Conservatives. Households coming off fixed-rate mortgages will be paying an average of £220 more a month and inflation remains high because of the Conservatives’ disastrous mini-budget.

“Labour’s plan for the economy is about returning stability and boosting growth so we can cut household bills, create better-paid jobs