Bank of England maintain 5.25% for 5th consecutive time

On Thursday 21st March 2024, the Bank of England voted on holding interest rates at 5.25% in a majority vote.

For the fifth time in a row, the Monetary Policy Committee (MPC) have decided against increasing the base rate. This decision comes as a means to meet the 2% inflation target, and in a way that helps to sustain growth and employment. In the latest Monetary Policy Committee meeting, 8 members voted to keep interest rates unchanged whilst one voted to reduce the rate down to 5%. This is the first time since September 2021 that not a single member of the Bank of England’s Monetary Policy Committee voted to raise interest rates.

The prime minister’s official spokesperson indicated that with inflation dropping to 3.4%m real wages rising, mortgage rates starting to fall, there’s clean sign that the economy has turned a corner after the shock of the last few years.

Governor Andrew Bailey said “In recent weeks we’ve seen further encouraging signs that inflation is coming down. We’ve held rates again at 5.25% because we need to be sure that inflation will fall back to our 2% target and stay there.” He went on to add “We’re not yet at the point where we can cut interest rates, but things are moving in the right direction.”

 

There has been a sharp decrease in inflation in recent months, with the consumer prices index falling to 3.4% in February. Whilst still above the 2% target set by the Bank, it’s well below the peak reading of 11.1% in October 2022.

The Monetary Policy Committee will be holding their next meeting on Thursday 9th May 2024.

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