What happened
The Bank of England Monetary Policy Committee voted 7 to 2 to keep Bank Rate at 3.75 percent, with two members wanting a rise to 4 percent. UK consumer price inflation has eased to 2.8 percent, but the Bank warned it could rise later this year as earlier energy price increases feed through.
Why it matters
Bank Rate sets the cost of borrowing across the economy, from mortgages to business loans. Holding steady signals the Bank thinks inflation is heading in the right direction but is not yet comfortable enough to cut, especially with volatile global energy prices linked to Middle East tensions.
Explained simply
Think of interest rates as a tap controlling how much money flows through the economy. When prices rise too fast, the Bank tightens the tap to cool things down. Inflation at 2.8 percent is close to the 2 percent target, so the Bank is holding the tap still, watching to see whether energy costs force it to tighten again.
What it means for you
Tracker and variable mortgage holders will see no immediate change, and fixed rates are unlikely to fall sharply while the Bank stays cautious. Savers should lock in the better fixed-rate ISA and savings deals now, because if inflation cools further, rate cuts later this year could pull those offers down.
