The Bank of England held interest rates at 5.25% at the meeting of its Monetary Policy Committee on Thursday, but it opened the door to rate cuts soon.

There was a three-way split on the MPC, with one member voting to cut rates, two voting to hike and the remaining six members voting to hold, according to minutes of the committee’s meeting.

Statements that accompanied the decision were seen as a signal the first rate cuts since BoE began hiking in mid-2022 could be on the way.

The rise from less than 1% to 5.25% has caused a collapse in real estate investment volumes and a sharp fall in values. Hopes are high that falling rates — or, at the very least, clarity that there will be no further rises — will kick-start transactions.

In his commentary accompanying the decision, Bank of England Governor Andrew Bailey did not mention the possibility of raising rates further. That was taken as a positive sign by financial markets that rates could be coming down as soon as April.

Bailey said that rates would need to come down at some point because if they remain at this level, inflation would drop too far below the BoE’s 2% inflation target.

Inflation has dropped sharply as a result of high rates, he said, but there is further to go before rate cuts become a certainty. Financial markets are pricing in cuts starting in April or May, with rates expected to fall to 4% to 4.25% by the end of the year.