'A tough call': Bank of England dovish move signals 'higher for longer' rates policy

‘Good chance’ of peak rates

The Bank of England’s decision to leave interest rates unchanged signalled the hiking cycle may be coming to an end, but experts believe the dovish move signals a ‘higher for longer’ rates policy.

For the first time in almost two years, the BoE opted to leave borrowing costs at 5.25% today (21 September), while warning that rates will remain high to tackle inflation. The committee's decision was a close call, with five voting to pause, while four voted in favour of a 25bps hike.  "Enough voters were either satisfied that inflation will not prove to be overly sticky or were concerned enough about downside risks to believe that a pause was warranted despite still high levels of inflation," said Oliver Blackbourn, portfolio manager at Janus Henderson. Investors had widely predicte...