The Bank of England voted today to hold the interest rates at 5.25% for the sixth consecutive time.
In an attempt to reduce inflation, the rate was set at its highest level for nearly 16 years. The Bank is being cautious about cutting the rate in order to reduce inflation to 2% without harming the economy. Currently, inflation is at 3.2%, an improvement but still above the Bank’s target.
According to the Bank’s accompanying report: “Progress is encouraging, but we are not yet at the point of cutting UK interest rates.”
This decision was widely expected, but looking at the makeup of the vote as well as the BoE’s economic forecasts can give some idea of how likely future cuts will be.
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