Bank of England maintains interest rate at 5 percent after Fed rate cut
Date
9/23/2024 9:33:33 AM
(MENAFN) The bank of England decided to keep its main interest rate steady at 5 percent on Thursday, despite a major cut from the United States Federal Reserve, marking its first reduction since the start of the coronavirus pandemic over.
The decision was largely anticipated due to persistent inflation concerns within the bank’s monetary policy committee, especially regarding high levels in the vital services sector, which makes up about 80 percent of the British economy.
Data released on Wednesday indicated that overall inflation in the United Kingdom remained steady at an annual rate of 2.2 percent in August, still exceeding the bank’s target
Minutes from the meeting revealed that eight of the nine committee members voted to maintain the current rates, while one member supported a quarter-point cut.
“The economy has been developing largely as we anticipated. If this trend continues, we should be able to gradually lower rates over time,” stated Bank Governor Andrew Bailey. "However, it is crucial that inflation remains low, so we must be cautious not to reduce rates too quickly or excessively.”
Having cut interest rates for the first time since the pandemic last month, the bank is widely expected to lower borrowing costs again at its next meeting in November, particularly as it will receive details of the government’s budget on October 30.
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