Bank of England maintains Bank Rate at 5.25%

The Bank of England’s Monetary Policy Committee, at its meeting ending on December 13, voted by a majority of 6-3 to maintain Bank Rate at 5.25%. Three members preferred to increase Bank Rate by 0.25 percentage points, to 5.5%. “In the MPC’s November Monetary Policy Report projections, conditioned on a market-implied path for Bank Rate that remained around 5% until 2024 Q3 and then declined gradually to 4% by the end of 2026, GDP was expected to be broadly flat in the first half of the forecast period, in part reflecting relatively weak potential supply, and an increasing degree of economic slack was expected to emerge from the start of next year. In the most likely, or modal, projection, CPI inflation returned to the 2% target by the end of 2025 and fell below the target thereafter. The Committee continued to judge that the risks to its modal inflation projection were skewed to the upside, such that the mean projection for CPI inflation was 2.2% and 1.9% at the two and three-year horizons,” the BOE stated.