The Bank of England (BoE) has decided to keep its benchmark interest rate at 5.25%, the United Kingdom’s central bank said in a statement on Thursday. At its meeting that ended on Wednesday, the BoE’s Monetary Policy Committee (MPC) voted to keep the UK interest rate on hold by a majority of 6 to 3. Three members wanted to increase interest rates by 0.25 percentage points.
UK inflation reached 6.7% in the 12 months to September, above the 2% target, but is expected to ease to 4.75% in the fourth quarter (Q4) of this year and 4.5% in the first quarter of 2024. According to a BoE report.
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“This decline is expected to be explained by lower inflation in prices of energy products, basic goods and food and, after January, a slowdown in inflation in services”, Added MPC statement.
The UK economy is expected to remain stable in the third quarter of this year, the BoE said, adding that some business surveys point to a slight contraction in output in the fourth quarter, but others are less pessimistic.
“Recent MPC projections indicate that monetary policy should remain tight over the longer term. If there is evidence of more persistent inflationary pressures, further tightening of monetary policy may be necessary,” he said.
Xinhua Agency
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