Stay informed with free updates
Simply sign up to the UK interest rates myFT Digest — delivered directly to your inbox.
The Bank of England has kept interest rates on hold at 5.25 per cent for the second successive meeting and warned monetary policy will need to stay restrictive for “an extended period of time” despite a bleak economic outlook.
The Monetary Policy Committee voted six to three to keep its benchmark rate unchanged at 5.25 per cent, as had been widely expected. A minority of members sought a further quarter-point increase.
The MPC’s vote to maintain rates at 5.25 per cent came after decisions to keep rates on hold by the US Federal Reserve on Wednesday and the European Central Bank last week. Those stances have bolstered investors’ confidence that the global rate rise cycle may have reached its peak.
BoE governor Andrew Bailey said the MPC would be watching “closely” to see if further rate rises were needed, adding “it’s much too early to be thinking about rate cuts.”
But new forecasts from the Bank show it is treading a delicate line as it seeks to beat inflation while not pushing a weakening UK economy into an outright recession in 2024 — which is expected to be an election year.
UK interest rates are at their highest levels since the financial crisis, as the bank weighs evidence of weak growth against consumer price inflation of 6.7 per cent.
This is a developing story
Read the full article here