The Bank of England deviated from their American counterparts at the Federal Reserve by announcing they were not cutting rates at this time.
In a statement, Gov. Andrew Bailey said, “Today we held interest rates at 4%. Since August last year, we have been able to cut rates five times. Inflation has come down a long way from its peak three years ago, but it remains too high.”
The Monetary Policy Committee voted 5-4 not to cut rates at a time when the UK’s annual rate of consumer price inflation stood at 3.8%, which is nearly double the central bank’s target.
Bailey added, “In our decision to hold interest rates today, we have balanced the risk that above-target inflation becomes more persistent against the risk that demand in the economy is weakening, which might cause inflation to fall too low. If inflation stays on track, we expect to be able to gradually cut rates further.”
