Bank of England keeps its main interest rate on hold at 5% in wake of big US Fed rate cut
The Bank of England is keeping its main interest rate unchanged at 5% despite a big cut from the U.S. Federal Reserve, its first since the onset of the coronavirus pandemic more than four years ago
LONDON (AP) — The Bank of England kept its main interest rate unchanged at 5% Thursday despite a big cut from the U.S. Federal Reserve, its first since the onset of the coronavirus pandemic more than four years ago.
The decision was widely expected amid ongoing concerns about inflation within the bank’s monetary policy committee, particularly the elevated levels in the crucial services sector, which accounts for around 80% of the British economy. Figures on Wednesday showed that inflation overall in the U.K. held steady at an annual rate of 2.2% in August, still above the bank’s goal.
Minutes to the meeting showed that eight of the nine members of the panel voted to keep rates unchanged, while one backed a quarter-point reduction.
“The economy has been evolving broadly as we expected. If that continues, we should be able to reduce rates gradually over time,” said Bank Gov. Andrew Bailey. "But it’s vital that inflation stays low, so we need to be careful not to cut too fast or by too much.”
