A cut to interest rates ‘on a knife edge’ as inflation remains unchanged at 2% – London Business News | Londonlovesbusiness.com

The Office for National Statistics (ONS) data shows that inflation is unchanged and remains at 2%.

Financial markets and some economists were expecting inflation to fall to 1.9%.

With inflation remaining at 2% the Bank of England’s (BoE) decision to lower interest rates “remains on a knife edge.”

Last month the BoE governor Andrew Bailey insisted that policymakers must “be sure that inflation will stay low” which is the reason as to why the decision was made to hold the base rate at 5.25%.

Darren Jones, chief secretary to the Treasury, said: “It is welcome that inflation is at target, but we know that for families across Britain prices remain high.

“We face the legacy of fourteen years of chaos and economic irresponsibility. That is why this government is taking the tough decisions now to fix the foundations so we can rebuild Britain and make every part of Britain better off.”

Tom Stevenson, investment director at Fidelity International, said: “The decision on whether to cut interest rates from a 16-year high of 5.25% next month remains on a knife edge.”