The Bank of England has kept its main interest rate unchanged at 4% as inflation in the UK remains markedly above target and policymakers await this month’s budget from the UK government, which could be one of the most consequential in years.

Thursday’s decision by the nine-member rate-setting body was widely anticipated, though some economists thought there was a chance that borrowing rates would be reduced by a further quarter of a percentage point.

The vote was tight though, with five voting for unchanged rates and four backing a cut.

“We still think rates are on a gradual path downwards, but we need to be sure that inflation is on track to return to our 2% target before we cut them again,” said Bank Governor Andrew Bailey.

The main reason why rates were kept on hold is that the ann

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