8:51 am, September 19, 2025
The Bank of England’s decision to hold interest rates at 4% offers ‘stability rather than stimulus’ to the automotive industry.
That is the verdict of Cox Automotive, which says that the move reflects the fact that ‘recent inflation figures leave little room for manoeuvre’.
The central bank’s Monetary Policy Committee (MPC) yesterday (Sep 18) voted to keep rates unchanged, following a 0.25 percentage point cut in August.
Cox has labelled the decision ‘disappointing’ for the motor industry, which is ‘still navigating a range of headwinds’.
Experts also called for a further cut to take place over the coming months in order to ‘provide a timely boost to consumer confidence and spending’.
Philip Nothard, insight director at Cox Automotive, said: ‘Although disappointing, as expected, the Bank of England has held the base rate at 4%, reflecting the reality that recent inflation figures leave little room for manoeuvre.
‘For the automotive sector, this mid-September decision comes at a critical point, with the industry still navigating a range of headwinds.
‘While a hold offers stability rather than stimulus, any future cut, potentially in November or December, would provide a timely boost to consumer confidence and spending, helping to shift the focus towards renewed growth momentum as we head into 2026.’
The MPC said it was being cautious about cutting borrowing costs until it had more evidence that pressures on UK inflation were easing.
It added that said the outlook for global trade policy continued to be ‘highly uncertain’ as a result of rising US tariffs.
Meanwhile, Consumer Prices Index (CPI) inflation stayed at 3.8% in August, official data showed on Wednesday, remaining at the highest level since the beginning of 2024 and above the Bank’s 2% target rate.
Confirming the decision to keep the base rate at 4%, Governor Andrew Bailey said: ‘Although we expect inflation to return to our 2% target, we’re not out of the woods yet so any future cuts will need to be made gradually and carefully.’
