The Bank of England has left its base interest rate unchanged at 5.25 per cent.

Its Monetary Policy Committee, which decides the rates, voted by a margin of 6-3 to keep them at 5.25 per cent; three members preferred to increase base rate by 0.25 percentage points, to 5.5 per cent.

The ‘hold’ was widely anticipated by economists and financial markets. In a statement this afternoon the Bank says: “Whilst this means many people will be facing higher borrowing costs, it is necessary to prevent high inflation lasting a long time.”

The Bank had previously raised rates 14 times in a row to tame inflation, leading to increases in mortgage payments but also higher savings rates.

In reports issued along with the base rate decision, the Bank says it expects a sharp slowdown in the pace of price rises in the coming months.

But governor Andrew Bailey says that nonetheless: “It’s much too early to be thinking about rate cuts” with rates set to stay high “for an extended period of time”.

And Bailey warns: “We’ll be watching closely to see if further rate increases are needed.”