Official inflation reports from the Office for National Statistics (ONS)

Bank of England Holds Interest Rates at 16-Year High of 5.25% Despite May Inflation Hitting Target

Jun 20, 2024, 11:03 AM

The Bank of England has decided to maintain its key interest rate at 5.25%, despite inflation in the UK hitting the central bank's target of 2% in May for the first time in nearly three years. This decision comes ahead of the upcoming UK general election on July 4, and the Bank's Monetary Policy Committee voted 7-2 in favor of holding the rate steady. Analysts had widely expected this outcome, citing persistent underlying inflation pressures. The Bank of England hinted that some policymakers were close to supporting a rate cut, suggesting that the first reduction could occur as early as August. Governor Andrew Bailey emphasized the need to ensure that inflation remains low before any cuts are made. The decision to hold rates at a 16-year high has significant implications for mortgage holders and businesses facing high borrowing costs. The decision was described as 'finely balanced' by some members of the committee.