We'll leave you today with a summary of what we learned from the Bank of England interest rate decision this lunchtime. 

The Bank's nine-member Monetary Policy Committee opted to hold the rate at 3.75% - a decision that had been widely expected.

But the vote was tight - five members wanted it to be held, while the other four wanted a cut to 3.5%.

This has ramped up anticipation for a cut either next month or April.

Markets expect that would be one of two cuts this year, taking the rate to 3.25% by December.

Here are four other key things to know: 

• The Bank =cut its outlook for economic growth from 1.2% to 0.9% this year, and from 1.6% to 1.5% in 2027;
• Inflation is now expected to reach the Bank's 2% target in April - a year earlier than had been predicted in November. Reduced rises in utility and energy bills are one key reason - smaller wage growth is another;
• Pay growth is expected to average 3.4% over the year, down from 4% in 2025;
• Trade union Unite criticised the Bank's decision, saying it risked "prolonging the cost of living crisis".

The Bank expects the unemployment rate to rise from an initial forecast of 5% to 5.3% by the middle of 2026.

This is something we've learned while scanning its Monetary Policy Report.

Savers are set to benefit most from the Bank of England's decision to hold the base rate, according to financial experts. 

Keeping the rate the same doesn't change much, which means the interest you earn on your savings is unlikely to fall. 

Philly Ponniah, chartered wealth manager and financial coach, said: "For the average person, a hold means more of the same. Budgets remain tight, but there is no new shock to absorb. 

"Mortgage holders avoid higher repayments, and while relief is not here yet, certainty matters when household finances already feel stretched. For borrowers, especially those on variable rates or refinancing soon, high costs are sticking around for longer.

"For savers, this is the upside of a hold, although we are already seeing banks cutting savings rates meaning they aren't as wed to the base rate as before."

Victor Trokoudes, founder and chief executive at money app Plum, said: "Savers can make the most of this hold in the base rate and continue to get inflation-beating returns on the money they set aside. 

"The main high street banks have been slower to pass on increases in the base rate to customers so it's important to explore other options – smaller banks, building societies, and fintechs are usually quicker to offer higher rates on savings accounts, including cash ISAs. Many are currently offering rates well above 4%." 

Contrary to our previous post, one leading set of economists thinks the base rate will drop to 3% this year.

Capital Economics made the forecast after the Bank of England struck a more dovish tone than expected this lunchtime.

While the Monetary Policy Committee voted to hold rates at 3.75%, economists said the split decision and accompanying commentary point to a faster and deeper easing cycle than markets currently expect.

"The Bank of England sounded more dovish than we expected, which supports our long-held view that interest rates will be reduced to 3% this year," Capital Economics said.

The consultancy highlighted the surprise 5-4 vote, with four policymakers pushing for an immediate cut, while Governor Andrew Bailey signalled further easing ahead.

"All going well, there should be scope for some further reduction in Bank Rate this year," Bailey said.

Capital Economics said softer inflation and subdued activity could ultimately push rates lower than markets anticipate.

As the news conference draws to a close, we can tell you that markets now expect the base rate to be cut twice more this year.

That would take the Bank's interest rate to 3.25% by December 2026.

A first cut of the year is expected this spring.

The Bank of England governor was asked moments ago whether he saw 3.25% as the place rates would settle long term.

Andrew Bailey, as you'd expect, wouldn't commit to an answer, saying "there is uncertainty around the neutral rate".

He pointed out that it's previously been said the neutral rate would be between 2% and 4% (he acknowledged this wasn't very illuminating).

He did concede that the path markets expect is a "reasonable profile to have at the moment" as we approach the "tail end" of the economic shocks we have seen and "move into a more settled world".

A little bit away from the interest rate decision, the Bank of England's deputy governor has just given us some interesting figures on the amount of gold being held by the Bank. 

Dave Ramsden says there are currently more than 400,000 gold bars being stored in the Bank's vaults, which are worth "many hundreds of billions of pounds". 

He adds that the Bank is the custodian of 60% of the gold in the London market, and business has been busy. 

"We have a very significant gold custody operation which is carried out under conditions of great confidentiality," he says. 

"We have seen over the last many months much more business. There are a lot of movements reflecting desire to bring that to market. January was a very busy month." 

Gold hit record highs last week, before taking a tumble at the beginning of this week. It then started to recover, but has taken another slight dip. 

At the time of writing this post, it stood at $4,841 per ounce. 

Our business and economics reporter Paul Kelso asks Andrew Bailey if it is now a matter of when, and not if, borrowers and homeowners will see the interest rate to fall. 

He says he expects the rate to fall, but adds there is still a "lot of uncertainty". 

"I do think it is likely that we will see some further move down in rates... but as we get closer to the neutral rate... these decisions become a closer call," Bailey says. 

"This is the question of what's the rate that will essentially settle it, in absent of further shocks. There is a lot of uncertainty there still." 

The Bank's base rate is likely to be reduced further, but the decision to make a cut will "become a closer call", Andrew Bailey says. 

He says the extent and timing of the reductions will depend on the economic outlook and inflation. 

"On the one hand, cutting the bank rate too quickly or by too much could lead to inflation pressures persisting, requiring policy to change course," he warns.

"On the other hand, waiting too long to ease policy could come at a cost of a sharper downturn in activity and subsequently inflation." 

Pay growth will average at 3.4% over this year, down from 4% in 2025, Bank of England governor Andrew Bailey says. 

"With a looser labour market and falling inflation supporting a fall in inflation expectations, we expect actual pay growth to fall somewhat below current expectations for pay settlements to about 3.2% by the end of the year," he says.

Pay growth affects the rate of inflation, which the Bank aims to keep at 2%.

Andrew Bailey begins the news conference with some "good news": the Bank of England expects inflation to fall from where it stands now at 3.4% and hit the 2% target in April. 

"My main ‍message today is one of good news. Disinflation is on track and ⁠looks to be ‌ahead of ‍the schedule that we expected in November," he says. 

He adds this is "about a year earlier" than the Bank expected then. 

"Recent developments provide more confidence that inflation is on track to return to the target soon, but we need to ensure that inflation falls all the way back to the 2% target and stays there," he adds. 

"So today, we've held the bank rate at 3.75%." 

He explains that lower wage growth and a reduction in the rises in utilities bills will help to bring inflation down. 

"Overall, the fall in the second quarter is 0.7 percentage points larger than we had expected in the November report," he adds. 

Energy bills are also forecast to come down, he says.