Bank of England keeps rates unchanged

The Bank of England (BoE) announced on Thursday that its Monetary Policy Committee (MPC) decided to keep interest rates unchanged.

The decision followed a split among officials over three ways on the right course for policy, with BoE Governor Andrew Bailey seeking more evidence inflation would return permanently to target.

Six out of nine members of the MPC voted to maintain rates at a 15-year high of 5.25 per cent. Jonathan Haskel and Catherine Mann chose to vote for a 0.25 percentage-point hike to 5.5 per cent, while Swati Dhingra voted for a cut of the same size to 5 per cent.

This is the first time since August 2008 – early in the global financial crisis – that different policymakers have voted to inch interest rates up and down at the same meeting.

“We need to see more evidence that inflation is set to fall all the way to the 2 per cent target, and stay there, before we can lower interest rates,” BoE Governor Andrew Bailey said in a press conference.

The BoE dropped its warning that “further tightening” would be required if more persistent inflation pressure emerged. Instead, the central bank said it would “keep under review for how long Bank Rate should be maintained at its current level.”