An Oxford economist has spoken out on the latest activity of interest rates.

The Bank of England has said interest rates could come down “gradually over time” after deciding to keep them unchanged at 5 per cent on Thursday.

Economists think the next cut to borrowing costs could come when policymakers next meet in November.

The Bank of England’s Monetary Policy Committee (MPC) kept the base interest rate unchanged at 5 per cent.

Andrew Goodwin, chief UK economist for Oxford Economics, said another rate cut in November was “almost certain”, as the MPC has reiterated that it would reduce rates gradually unless there were any surprises to the economy.

Eight of the nine members on the MPC voted to keep rates the same, with one member preferring to cut them to 4.75 per cent.

Last month, the central bank reduced rates from 5.25 per cent – a milestone moment as it represented the first time they had been cut since 2020.

Some economists think that the Bank of England signalled in its messaging on Thursday that it could be in a position to cut interest rates again when the MPC next meets in November.

This is because new economic data could give it more confidence that inflation is continuing to go in the right direction.

Janet Mui, head of market analysis at RBC Brewin Dolphin, said: “It is fair to expect that the Bank of England will be able to keep cutting rates over the course of the next 12 to 18 months, but at a gradual and modest pace.”

“The next cut is largely expected to be November,” she said, but stressed that the Bank’s decision-making will be dependent on the latest economic data.

Andrew Bailey, the Bank’s governor, said on Thursday: “The economy has been evolving broadly as we expected.

“If that continues, we should be able to reduce rates gradually over time.”

The base rate influences the price that banks charge customers for mortgages and loans.

It is used as a tool to control inflation across the UK.

Hikes in recent years have left mortgage rates much higher than was normal for most of the last decade.

However, mortgage rates have been edging down in recent weeks after the Bank kickstarted an expected cycle of interest rates cuts.

Sam Richardson, deputy editor of consumer platform Which? Money, said: “The Bank’s decision to hold rates where they are won’t come as a surprise, but will nevertheless still be a disappointment to homeowners coming towards the end of their fixed-term deal who would have been hoping for downward movement in the market.”