- ORIGINAL NEWS
Divided Bank of England leaves policy unchanged, says interest rates are ‘under review’
- SUMMARY
The Bank of England held interest rates steady amidst differing opinions among board members.
The Monetary Policy Committee voted to hold rates, with two members favoring a further increase and one favoring a cut.
Inflation is projected to fall temporarily to the bank’s target in the second quarter of this year but then rise again in the third and fourth quarters due to energy price fluctuations.
Headline inflation is not expected to return to target until late 2024, according to the bank’s latest report.
There are signs of easing in key indicators of the labor market, such as wage growth and services inflation.
Rate cuts are not expected to materialize in the near future, as eight out of nine MPC members still advocate for keeping rates at current or higher levels.
- NEWS SENTIMENT CHECK
- Overall sentiment:
neutral
Positive
“The MPC remains prepared to adjust monetary policy as warranted by economic data to return inflation to the 2% target sustainably.”
“The U.K. economy is in somewhat of a malaise, and rates at this level for too long may end up being overly constrictive.”
Negative
“Headline inflation is not expected to return to target again until late 2026, the bank’s newest Monetary Policy Report projected.”
“Inflation is projected to fall temporarily to the bank’s 2% target in the second quarter of this year before rising again in the third and fourth, due to the varying contribution of energy prices to annual comparisons.”