The Bank of England Keeps Rate at 5.25%, Anticipating Inflation Decrease

Today, at the meeting, the Bank of England decided not to change the base interest rate, leaving it at 5.25%.

This is the peak since 2008, which remains unchanged since September, after 14 consecutive increases. The expectations of analysts and the market were met.

Of the nine members of the Monetary Policy Committee (MPC), only Swati Dhingra, known for her dovish stance, voted for a decrease of 25 basis points.

The growth of consumer prices in February slowed to 3.4% annually, which is the lowest since September 2021.

Core inflation also fell to 4.5%. It is expected that inflation will drop below 2% in the second quarter, and then slightly increase.

The Bank emphasizes the need to maintain strict monetary policy to stabilize inflation at a 2% level.

The Monetary Policy Committee does not rule out policy adjustments to achieve this goal, closely monitoring economic indicators.

The next meeting, scheduled for May 9, will bring new economic forecasts.

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Pound plummets after Bank of England chief hints at rate cuts

The British pound sterling fell by more than 1% to a three-week low following statements by Andrew Bailey about a possible more aggressive reduction in interest rates.

The market expects a rate cut in August. The pound to dollar rate slightly decreased, and the FTSE 100 stock index rose by 1.5%.

Previously, the Federal Reserve System (Fed) confirmed its decision to keep the key interest rate at the previous level of 5.25-5.5%, in line with market expectations, aiming to simultaneously control inflation and maintain employment levels.

Also, the Reserve Bank of Australia decided to keep the key interest rate at 4.35%, thus meeting the expectations of analysts and making no changes to the current monetary policy.