The Bank of England (BoE) has confirmed it will hold interest rates at their current level of 4.25%.

It follows the 0.25% cut to the base rate last month, the fourth by the central bank since it started to bring interest rates down from a recent peak of 5.25% last August.

At its meeting this week, the nine members of the BoE’s Monetary Policy Committee (MPC) voted by a majority of six to three to maintain rates at 4.25%. Three members were in favour of another 0.25% cut, which would have taken the base rate down to 4%.

The BoE’s decision follows yesterday’s announcement by the Office for National Statistics (ONS) that the UK’s rate of consumer prices index (CPI) inflation had crept up to 3.4% in the year to May.

In the MPC’s report published today, it said the rise in inflation was largely due to “a range of regulated prices and previous increases in energy prices”. The MPC is predicting inflation to “remain broadly at current rates throughout the remainder of the year”, before falling back towards its 2% target next year.

CEO of Just Mortgages and Spicerhaart, John Phillips, said the decision to hold rates was “not unexpected” and “in line with the bank’s careful and gradual approach.

“Yesterday’s news on inflation wouldn’t have been enough to sway them, especially with current geopolitical tensions and in light of further escalation in the Middle East and the potential ramifications this could have on prices and global trade,” Phillips commented.

“While the changing narrative around interest rate expectations and the number of cuts isn’t entirely helpful and goes some way to unsettle borrowers, we can take comfort that the consensus is still that interest rates will be cut.”

Chief commercial officer at Fleet Mortgages, Steve Cox, suggested that today’s decision has “raised the prospect” of a cut at the MPC’s next meeting in August.

“A lot can happen both internationally and domestically between now and then, which means it’s very difficult to predict this seven or so weeks in advance,” he added.

“It’s important to note, however, that in the buy-to-let market and other mortgage product sectors, pricing is not generally dictated just by movements in bank base rate, and we’ve seen a continued fall in swaps having a bigger impact.”

For the later life lending market, managing director of capital markets and finance at LiveMore, Simon Webb, commented that the “consistency is welcome.”

“After a period of significant economic volatility, a steady rate environment allows brokers to have more informed conversations with clients about their long-term financial plans,” Webb said.

“We remain optimistic about the outlook for later life lending. With demand growing and awareness increasing, there are real opportunities to support older borrowers with tailored, flexible solutions – particularly as the market prepares for the potential of further rate cuts later in the year.”

The BoE’s next base rate decision will be announced on 7 August.

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