The Bank of England has held interest rates at 5.25% for the seventh time in a row, despite official figures showing inflation falling to the Bank’s target of 2% for the first time in nearly three years.
The Monetary Policy Committee (MPC) voted to maintain the current 16-year high in rates, with seven members voting to hold rates and two backing a 0.25 percentage point cut.
Governor Andrew Bailey stated that policymakers need to ensure inflation stays low, and the decision to hold rates at 5.25% is a result of the Bank’s efforts to reduce inflation.
The Office for National Statistics (ONS) reported that services inflation fell to 5.7% in May, less than expected, causing financial markets to push back expectations of the Bank’s first rate cut of the year.
