Kevin Brown, savings expert at Scottish Friendly, has commented on the Bank of England’s decision this afternoon to hold its base rate at 3.75 percent

“December’s CPI uptick showed how quickly price pressures can reappear, and by holding rates today, the Bank of England clearly wasn’t prepared to risk another cut so soon.

“But this pause shouldn’t be mistaken for a change in direction. The labour market is cooling, wage growth is slowing, and inflation is anticipated to fall this year as price pressures fade. “If that plays out as expected, one or two further cuts later this year are still on the cards, with spring still the most likely window for the next move.

“However, today’s decision and the Bank’s expected direction of travel underlines a growing dilemma for savers. Inflation at 3.4% means many easy-access savings rates are losing ground. Even when interest is being paid, the purchasing power of cash can quietly shrink month after month.

“We’ve always been firm on the important role cash plays for short-term needs and peace of mind but relying on it alone in a cooling-rate environment risks standing still while purchasing power diminishes.

“Investing remains a realistic way to protect that purchasing power and build wealth over time, especially as inflation continues to do more damage to cash than many people realise.”