THE BANK of England was told to “get a grip” after announcing today that interest rates will remain at 5.25 per cent even though inflation hit the government’s 2 per cent target last month.

Governor Andrew Bailey said that policy-makers “need to be sure that inflation will stay low and that’s why we’ve decided to hold rates at 5.25 per cent for now.”

In response, Unite general secretary Sharon Graham said: “Once again, the Bank of England has failed to act in the interest of workers and hard-pressed families.

“Major economies across the world have cut interest rates and the UK must follow suit.

“High interest rates boost the profits of City bankers but hit all of us paying mortgages and rents in the pocket. It’s time for the bank to get a grip.”

Dr George Dibb, associate director for economic policy at the Institute for Public Policy Research think tank, added: “The Bank of England has tightened the screws too much for too long, holding back the UK’s economic recovery.

“It should have followed the European Central Bank by starting to cut rates today.

“The bank has to balance lingering price rises, notably in services, with the UK’s zero economic growth and a cooling labour market.

“With inflation expectations back down to pre-pandemic levels, it’s time for the bank to switch gears, support the economy more and cut rates.” 

Some members of the bank’s nine-person monetary policy committee felt that “more evidence of diminishing inflation persistence was needed” before rates could be safely cut, raising concerns over wage growth rising faster than forecast and stubbornly high services inflation.

However, committee members Swati Dhingra and Dave Ramsden again voted for a reduction, arguing that inflation looks set to remain at normal levels.