UK Base Interest Rate Held at 5.25%... Growing Calls for a Cut

Predominant Expectations of Interest Rate Cuts This Summer

The Bank of England (BOE), the central bank of the United Kingdom, has kept the base interest rate steady at 5.25% per annum.

Bank of England (BOE), the central bank of the United Kingdom
Photo by AFP Yonhap News

On the 9th (local time), The Guardian reported that the BOE maintained the base interest rate at 5.25% per annum during its Monetary Policy Committee meeting.

Among the nine members attending the Monetary Policy Committee, seven voted to keep the rate unchanged, while two favored a 0.25 percentage point cut. The number of members supporting a rate cut increased by one compared to the March meeting.

Andrew Bailey, Governor of the BOE, stated, "There has been encouraging news regarding the inflation rate, and it appears that inflation will fall close to our 2% target within the next two months."

He added, "We need more evidence that inflation will remain low before cutting rates," and explained, "I am optimistic that the situation is moving in the right direction."

Major media outlets, including the Financial Times (FT), analyzed this as a signal of a possible rate cut at the next Monetary Policy Committee meeting, which could be held as early as June 20.

The BOE raised the base interest rate 14 consecutive times starting from December 2021 (0.10%). However, it stopped raising rates in September last year and has kept the rate unchanged for six consecutive times up to this month.

In a statement released that day, the BOE said, "The Committee will consider upcoming data releases and what information these provide regarding the reduced risk of persistent inflation," and "Based on this, the Committee will continue to review how long to maintain the current interest rate level."

On the same day, the British pound fell 0.4% from the previous day to $1.2447 per pound.

This content was produced with the assistance of AI translation services.