This decision comes as inflation remains above the Bank’s 2% target, currently sitting at 3.2%. While inflation has shown signs of receding, the MPC acknowledged the need for continued vigilance.
“The MPC’s remit is clear that the inflation target applies at all times, reflecting the primacy of price stability in the UK monetary policy framework,” the Bank of England said in a statement today.
The vote to hold rates steady was not unanimous, with two members of the MPC favouring a reduction of 0.25 percentage points. However, the majority view was that maintaining the current rate is necessary to keep inflation in check.
The Bank of England is tasked with managing inflation and promoting economic growth and employment. By keeping interest rates high, the Bank aims to curb inflation by slowing down borrowing and economic activity.
This decision will likely have a mixed impact on borrowers and savers. Borrowers, such as those with variable-rate mortgages, will continue to see no change in their interest rates. Savers, on the other hand, may see a continued decline in interest rates on savings accounts.
The Bank of England will continue to monitor economic data closely and adjust interest rates as needed to meet its inflation target.
Across the pond, there is chatter that we won’t might only see one to 2 interest rate cuts from the US Federal Reserve this year, so things look like they will continue to costs us more for the majority of 2024.
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