LONDON: The Bank of England decided against lowering its main interest rate on Thursday, keeping it at a 16-year high because inflation is still strong despite recent slowdowns.
As inflationary pressures continue to subside, BoE governor Andrew Bailey did, however, hint at a rate decrease later this year.
The British central bank followed the US Federal Reserve’s Wednesday decision by maintaining its base rate at 5.25 percent.
The UK annual inflation rate fell more than anticipated, according to official data, which led to anticipation that the BoE might begin reducing borrowing costs in the summer. This was the day before the rate announcement.
February had an almost 2.5-year low of 3.4 percent in inflation.
That outperformed experts’ estimates of 3.5 percent and represented a decrease from 4 percent in January, but it is still persistently higher than the BoE’s official 2 percent goal level.
In comments that were released with the ruling, Bailey stated, “We’ve seen further encouraging signs that inflation is coming down in recent weeks.”
We need to be certain that inflation will return to and remain at our 2 percent objective, which is why we have kept rates steady at 5.25 percent today.
