Bank of England holds rates steady as inflation remains above target
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The Bank of England’s Monetary Policy Committee (MPC) voted to hold base rates today at 4.25%, as broadly expected by markets. Out of the nine committee members, six voted to hold rates whilst three opted for a 0.25% cut.
Chris Helyar, Partner in LCP’s investment team, commented:
“The decision to hold rates at 4.25% reflects the MPC’s cautious stance amidst lingering inflationary pressures and persistent political uncertainty. CPI eased to 3.4% in May but remains well above the 2% target. Rising household costs have contributed to elevated inflation in recent months, while increased tensions in the Middle East have driven up global oil prices, adding further inflationary pressure.”
He added:
“Disappointing economic growth figures, rising unemployment along with slowing wage growth had provided the MPC with arguments for a further cut, but weren’t enough to tip the balance that way. Today’s decision underscores a wait-and-see narrative in what is a very uncertain economic and geopolitical environment.”
