What happened
The Bank of England left its main interest rate unchanged at 3.75 percent. The Monetary Policy Committee voted 7 to 2 to hold, with two members preferring a cut.
Policymakers said easing inflation was encouraging but that volatile global energy prices tied to Middle East tensions kept them cautious.
Why it matters
Interest rates set by the Bank ripple through the whole economy, shaping the cost of mortgages, loans and the returns on savings. A hold means borrowing costs stay where they are rather than rising or falling.
It also signals the Bank is not yet confident that inflation is beaten, so cuts that markets once expected have been pushed back.
Explained simply
Think of the interest rate as a thermostat for the economy. When the economy runs hot and prices climb too fast, the Bank turns the dial up to cool things down. When it turns cold, it turns the dial down to warm things up. Right now the Bank is keeping its hand on the thermostat, watching the room, and choosing not to touch it until it is sure which way the temperature is heading.
What it means for you
If you are on a tracker or variable mortgage, your payments will not change this month. Savers should note that the best easy access and fixed rate accounts still pay around the current rate, so it is worth shopping around rather than leaving cash in a low paying account. Anyone remortgaging soon may want to compare fixed deals now, since the Bank may hold rates higher for longer than expected.
