Bank of England Maintains Policy Rate
This decision follows the central bank’s previous action of lowering the rate by 25 basis points at its last meeting, after keeping it steady during the two prior sessions. The Bank Rate now remains at its lowest point since 2022.
The Monetary Policy Committee of the bank reached the conclusion by a narrow 5-4 vote, with four members favoring a 25 basis point reduction.
"Although above the 2% target currently, CPI inflation is expected to fall back to around the target from April, owing to developments in energy prices including from Budget 2025," the bank stated.
The statement added that, considering the effects of monetary policy and evidence of moderate economic expansion along with rising labor market slack, pay growth and service price inflation have generally continued to moderate.
"The risk from greater inflation persistence has continued to become less pronounced, while some risks to inflation from weaker demand and a loosening labour market remain," the central bank commented.
Finally, the Bank of England noted, "The restrictiveness of policy has fallen as Bank Rate has been reduced by 150 basis points since August 2024," suggesting that the policy rate may be lowered further based on current evidence.
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