(qlmbusinessnews.com . Fri 7th Nov, 2025) London, UK —
Navigating the Economic Forecast: How the Bank of England's Decision Affects You
In a closely fought decision, the Bank of England has opted to maintain interest rates at 4%, signalling a possible peak in the UK's inflation rates.
Wondering how this decision might affect your mortgage repayments? Explore our QLM Mortgage Calculator for insights.
The decision, reached with a narrow majority of 5-4 during Thursday's vote, suggests a cautious stance towards future rate adjustments, with the Bank hinting at a potential gradual decrease in borrowing costs.
Bank of England Governor Andrew Bailey expressed a preference for a ‘wait and see' approach regarding further rate cuts, prioritising the need for continued evidence of a slowdown in pricing pressures.
This announcement arrives in anticipation of Chancellor Rachel Reeves' forthcoming Budget presentation on 26 November amid rumours of possible tax hikes. Despite Labour's campaign promises, increases in income tax, National Insurance, or VAT remain on the table, according to Reeves.
In response to the Bank of England's latest fiscal outlook, Reeves highlighted predictions of a quicker-than-anticipated fall in inflation, outlining her Budget's aim to establish a resilient economic foundation by addressing pressing issues such as waiting lists, national debt, and the cost of living.
However, Shadow Chancellor Mel Stride criticised the Government's economic strategy, attributing prolonged high-interest rates to perceived shortcomings in Reeves’ fiscal planning.
Despite a current inflation rate of 3.8%—almost twice the Bank's target—Governor Bailey stressed the need for further evidence of inflation deceleration before considering rate reductions.
The Bank's quarterly economic update painted a picture of cautious consumer behaviour, with no indication of growing consumer confidence. A notable shift towards value-focused shopping and saving rather than spending was observed.
Amid stubbornly high global agricultural prices, the Bank anticipates sustained food price inflation into the current year, gradually stabilising come 2026.
Retail challenges were highlighted, including the impact of the second-hand market on fashion sales and the shift towards more budget-conscious habits among consumers, such as increased vegetable consumption and less meat.
Business sentiments reflected cautious optimism, tempered by apprehensions over labour costs and the uncertain fiscal landscape awaiting the Chancellor's Budget announcement. Concerns over National Insurance hikes last April and subdued investment intentions were noted, alongside the expectation of unemployment rates stabilising around 5% until 2028.
The report also shed light on competitive job markets and a prevalent preference for job security over salary growth, reflecting the current uncertain economic climate.
Inflation moderation efforts guided the Bank's decision to keep interest rates steady, with implications for borrowers and savers alike. While the immediate future suggests a pause, potential rate cuts in the coming months were not ruled out, hinging on forthcoming economic data and Budget implications.
The government has earmarked economic growth as a cornerstone of its strategy to enhance living standards, recognising the delicate balance required in managing interest rate adjustments against inflation and economic vitality.
For insights into how these developments might influence your mortgage payments, do not miss out on our QLM Mortgage Calculator.
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