The Bank of England (BoE) has decided to maintain its benchmark interest rate at 5.25 percent, the United Kingdom’s (UK) central bank said in a statement on Thursday.
At its meeting ending on Wednesday, the BoE’s Monetary Policy Committee (MPC) voted by a majority of 6-3 to hold the rate. Three members preferred to increase it by 0.25 percentage points.
UK inflation rose by 6.7 percent in the 12 months to September, remaining well above the 2 percent target, but is expected to fall sharply to 4.75 percent in the fourth quarter (Q4) of this year and 4.5 percent in the first quarter of 2024, the statement noted.
« This decline is expected to be accounted for by lower energy, core goods and food price inflation and, beyond January, by some fall in services inflation, » it added.
UK economy is expected to have been flat in the third quarter of this year, the BoE said, noting that some business surveys are pointing to a slight contraction of output in Q4, but others are less pessimistic.
« The MPC’s latest projections indicate that monetary policy is likely to need to be restrictive for an extended period of time. Further tightening in monetary policy would be required if there were evidence of more persistent inflationary pressures, » it said.
