Pound falls as UK interest rates left on hold in ‘finely balanced’ decision – as it happened

Bank of England leaves interest rates unchanged despite inflation falling to its 2% target yesterday

• FULL STORY: Bank of England keeps interest rates on hold at 5.25%

The Bank of England is likely to cut interest rates in August, rather than today, predicts Barret Kupelian, chief economist at PwC:

With headline inflation hitting its target rate, the Bank's Monetary Policy Committee is nudging closer to cut its policy rate. The tide is clearly turning, but we still feel that the Bank is not quite there yet.

Services inflation continues to remain significantly above its own projections (5.7% vs 5.3%), in part due to a tight labour market and also because of erratic factors.

Based on the Committee's current assessment of the outlook and balance of risks, the policy rate will likely be kept at that level for some time ahead.