The Bank of England has made the decision to maintain its interest rates at 5.25%, marking the highest level seen in 15 years. This move is driven by the positive news of a faster-than-expected slowdown in price inflation, as revealed in recent data for August.
This will provide some relief to mortgage borrowers, but it could be a long time before rates start to fall.
It is the first time since November 2021 that the BOE has left rates stable after 14 consecutive increases. Officials have still left the door open to further rises in the future in order to return inflation to a level of 2%.
Interest rates have potentially peaked but analysts are warning that they may plateau at today's levels for a year or more. This means homeowners whose fixed-rate mortgages mature in the months ahead still face a daunting increase in repayments.
Inflation may have surprised everyone by falling in August by 0.1%. That's a long way from two percent. A bigger drop is expected when September’s figure is published.