The Bank of England has maintained its interest rates at the same level during its November session, continuing the halt from September.
Governor Andrew Bailey explains today’s interest rate decision. pic.twitter.com/d86FXza0la
— Bank of England (@bankofengland) November 2, 2023
The decision to keep the rates at 5.25%, a peak that hasn’t been reached in 15 years, was made by the Monetary Policy Committee with a vote of 6–3. This move is part of their ongoing efforts to reduce inflation to the 2% target.
However, they have not ruled out the possibility of future rate hikes, noting that inflation risks are “predominantly on the higher side”.
“The Monetary Policy Committee must enforce a sufficiently stringent monetary policy for an adequate duration to consistently achieve the 2% inflation target over the medium term, as mandated,” the Bank of England stated.
The Bank of England Maintains Interest Rates at 5.25%… The Bank of England has decided to keep the interest rates constant at their peak of the last 15 years, which stands at 5.25%.
A majority of 6 to 3 members of the Monetary Policy Committee were in favour of maintaining… https://t.co/OB29TDchJn pic.twitter.com/9abvR7Qsxt
— Share_Talk ™ (@Share_Talk) November 2, 2023
The Bank anticipates that the UK’s GDP for the third quarter will show no growth, a performance weaker than what was forecasted in their August report.
They predict a slight GDP growth of 0.1% for the fourth quarter, which is again below their previous expectations.
By the end of 2025, the Bank of England expects the Consumer Price Index (CPI) inflation to meet the 2% target.
Their projections are based on the assumption that the Bank Rate will hover around 5.25% until the third quarter of 2024, after which it will gradually decrease to 4.25% by the close of 2026. This is a more modest trajectory than what was outlined in their August projections.
Megan Greene, Jonathan Haskel, and Catherine Mann, three members of the Bank of England’s Monetary Policy Committee, were in favour of increasing the rate to 5.5%.
