ISTANBUL, Nov 7 (AA/APP): The Bank of England on Thursday kept its benchmark interest rate unchanged at 4%, in line with the market forecasts.
The move marked the second one in a row after the bank ended a five-rate-cut run in September.
The decision was taken by the bank’s Monetary Policy Committee by a narrow 5-4 vote. Five members voted for no change for the bank rate, while four others voted for a 25 basis point cut.
“Consumer price index (CPI) inflation is judged to have peaked. Progress on underlying disinflation continues, supported by the still restrictive stance of monetary policy,” a bank statement said.
“This is reflected in an easing of pay growth and services price inflation. Underlying disinflation is being underpinned by subdued economic growth and building slack in the labour market,” it noted.
Stating that monetary policy is being set to balance the risks around meeting the 2% inflation target sustainably, the central bank said the risk of inflation staying high has recently decreased, while the risk of weaker demand lowering inflation has grown — making the overall outlook more balanced.
“But more evidence is needed on both,” it stressed, adding that the extent of further rate cuts will depend on the evolution of the outlook for inflation.
“If progress on disinflation continues, Bank Rate is likely to continue on a gradual downward path,” the Bank of England added.
Annual consumer inflation in the UK was at 3.8% in September, stable from the previous month, but staying at its highest level since January 2024.