The Bank of England (BoE) announced on Thursday its decision to keep the benchmark interest rate at 5.25% for the sixth time in a row. Seven out of nine members of the Monetary Policy Committee (MPC) supported the move, while two favored a cut of 25 basis points (bps).
The BoE described the decision as necessary to take the annual inflation rate to its target of 2% "in a way that helps to sustain growth and employment." It stressed it will maintain a restrictive monetary policy until it achieves that goal.
Furthermore, the bank predicted the United Kingdom's gross domestic product (GDP) will grow by 0.4% in the first quarter of 2024 and 0.2% in the second, with "demand growth ... expected to remain weaker than potential supply growth throughout most of that period."