Bank of England officials have signalled a cautious approach to further interest rate cuts after fresh data showed persistent core inflation and strong wage growth in Britain’s services sector.

The Office for National Statistics figures prompted financial markets to revise their expectations for borrowing costs over the winter quarter. The Monetary Policy Committee’s measured stance puts the persistence of price and pay pressures at the centre of the outlook for further cuts.

The distinction is between the prospect of lower rates and the pace at which they might fall. Officials’ caution does not establish a timetable, while the shift in market expectations is not itself a policy decision. The timing and extent of further reductions remain unresolved.