Most economists expect the Bank of England to hold UK interest rates at 5.25 per cent once again on Thursday, as the effect of 14 consecutive rate rises <a href="https://www.thenationalnews.com/business/uk/2023/10/18/uk-inflation-rate-held-at-67-per-cent-in-september/" target="_blank">slowly lowers inflation</a>. In a poll conducted by Reuters, 61 out of 73 economists predicted the Bank's Monetary Policy Committee (MPC) would <a href="https://www.thenationalnews.com/world/uk-news/2023/11/01/uk-house-prices-show-unexpected-monthly-rise-in-october/" target="_blank">leave rates on hold this month</a>. But that's not to say that interest rates have peaked. Many economists say the MPC is keeping its powder dry and another 0.25 percentage point rate rise could be in the offing before the winter is over. Overall inflation in the UK did not drop in September, remaining stuck at 6.7 per cent, more than three times the BoE's target of 2 per cent. That goal is not expected to be reached until the second quarter of 2025, economists say, meaning the MPC will lean towards keeping rates higher for longer. But the slowdown in core inflation, which strips out food and energy prices, was recently described by BoE governor Andrew Bailey as "quite encouraging". However, some feel keeping rates higher for longer could tip the country into a recession, if indeed the British economy is not already in one. Recent figures from various parts of the economy indicate a considerable slowing of activity. On Wednesday, the S&P Global/CIPS manufacturing Purchasing Managers' Index (PMI), which indicates levels of activity in factories, stood at 44.8, down from an early estimate of 45.2. The output element of the PMI figure saw a contraction for the eighth straight month, the longest such run since the global financial crisis of 2008. Susannah Streeter, head of money and markets at Hargreaves Lansdown, said the UK economy was already "flatlining", with growth "proving very elusive". "If wage growth and goods and services price increases keep heading down, it'll make policymakers more adverse to another hike," she added. Economists from HSBC predict the MPC will vote six to three in favour of leaving rates on hold on Thursday but that the BoE will "keep the door open to future tightening". BoE chief economist Huw Pill last month said while decisions on interest rate were becoming increasingly "finely balanced", the MPC "will do what we need to do in order to have inflation at 2 per cent on a lasting basis”. That fine balance is illustrated by the fact that at its last meeting in September, four of the nine-person MPC voted to raise interest rates to 5.5 per cent. "It would only take one committee member to change their mind to tip the balance in favour of more tightening – but we're doubtful," said James Smith, a developed markets economist at ING.