14 December: Euro Central Bank Also Freezes Rates
The Bank of England has held its Bank Rate untouched at 5.25% for the third time in a row, Andrew Michael writes. It reached this level in August 2023.
In a widely expected move that echoed yesterday’s decision by the US Federal Reserve to keep rates on hold (see story below), the Bank’s Monetary Policy Committee (MPC), voted by six votes to three to maintain the influential rate at a 15-year high of 5.25%.
Each of the three dissenting voices within the MPC voted for a hike in the rate of 0.25 percentage points to 5.5%.
Explaining its decision, the Bank said: “Since the MPC’s previous decision, consumer price index inflation has fallen back broadly as expected, while there has been some downside news in private sector regular average weekly earnings growth.
“However, key indicators of UK inflation persistence remain elevated. Monetary policy will need to be sufficiently restrictive for sufficiently long to return inflation to the 2% target in the medium term, in line with the Committee’s remit.”
Inflation stood at 4.6% in October, according to the Office for National Statistics. The November figure will be published next week.
The next official Bank Rate announcement will be made on 1 February 2024.
Today’s announcement by the Bank of England, its last rate-setting decision of 2023, will provide partial relief to millions of mortgage customers and other borrowers on…
