The central bank's Monetary Policy Committee has opted to keep the cost of borrowing at its current level, which means higher interest rates for households
The Bank of England has confirmed the UK's base rate at 3.75 per cent in another blow to Britain's borrowers.
At midday, the central bank's Monetary Policy Committee (MPC) voted to keep the cost of borrowing at its current level in the fifth meeting in a row.
The UK's base rate helps banks, building societies and lenders set interest rates for various products, including bonds, savings and mortgages.
While today's decision from the Bank will be a relief for savers looking to take advantage of higher rates, borrowers looking for cheaper mortgages and debt repayments will likely be disappointed.
In response to a spike in inflation post-Covid, central banks across the world have opted to hike interest rates to ease inflationary pressures on consumers.
For today's decision, six members of the nine-person committee chose to keep interest rates at 3.75 per cent, including the Bank of England's governor Andrew Bailey.
However, the other three members, including Huw Pill, Megan Greene and Catherine Mann, voted to increase interest rates to four per cent.
According to the group's official statement, the MPC claimed it has to set interest rates to balance the risk of too much or too little inflation.
Louise Halliwell, group savings director at Kent Reliance, said: "Holding interest rates may offer reassurance that borrowing costs are no longer rising, but our data suggests many households remain firmly in 'protection mode'.
"Consumers are continuing to cut back on saving or draw on existing savings to manage higher bills, highlighting that financial confidence doesn't necessarily translate into greater financial resilience."
Isaac Stell, an investment manager at Wealth Club, added: "Against a turbulent economic backdrop, the Bank of England has kept interest rates unchanged for a fifth consecutive meeting, opting for caution as policymakers assess the impact of geopolitical tensions and their implications for inflation.
"The decision will come as little surprise, with financial markets having largely priced in no change ahead of today's announcement. Inflation eased in June, helped by lower energy prices, but the Bank continues to tread carefully as global events complicate the outlook.
"The increasingly interconnected nature of the global economy means shocks can quickly ripple through supply chains, commodity markets and ultimately consumer prices.
"Recent tensions in the Middle East are a case in point, while rapid policy shifts from the White House have added another layer of uncertainty for central bankers worldwide."
Suren Thiru, ICAEW Chief Economist, shared: "Keeping interest rates on hold is a predictably pragmatic response to the conflicting realities of softer-than-expected inflation on the one hand and renewed US-Iran hostilities threatening a fresh wave of price rises on the other.
"The tighter vote split in favour of this outcome confirms a further hawkish shift within the committee with inflation worries outweighing concerns over the economy, keeping a September rate rise on the table."
