Kevin Brown on the latest MPC announcement that shows interest rates have held

“With tensions seemingly easing in the Middle East (1) – and inflation remaining at 2.8 per cent for May (2) – the backdrop to today’s Monetary Policy Committee meeting was not as fraught as may have been feared.

“Policymakers have now been handed evidence that inflation is not currently accelerating despite the Middle East energy shock. The picture is still far from rosy, but households can take some relief that the Bank of England has not piled a rate hike onto an already complicated picture (3)

“July’s higher energy bills (4) have yet to feed through to households, while transport inflation has already jumped sharply on the back of fuel costs (5). Inflation therefore may yet climb before it falls.

“For households, that means the cost-of-living squeeze isn’t over, even if today’s decision avoids tightening the screw further. Reviewing savings rates, building a financial buffer where possible and considering whether longer-term money could work harder through investing remain sensible steps that individuals may want to consider in the current environment.”

(1) Source: Iran-US war latest: Trump threatens to ‘drop bombs smack in the middle of their head’ if he doesn’t like deal with Tehran | The Independent

(2) Source: Consumer price inflation, UK - Office for National Statistics

(3) Source: Economic indicators: Key statistics for the UK economy - House of Commons Library

(4) Source: Martin Lewis: For most people, July’s 13% Energy Price Cap rise is voluntary – it can (and should) be avoided

(5) Source: [HK5]Consumer price inflation, UK - Office for National Statistics