LONDON – The Bank of England cut interest rates for the first time in more than four years on Thursday, taking the key interest rate to 5%.
While some analysts say the Bank of England may announce a rate cut at its latest meeting, the decision is shrouded in uncertainty due to a lack of clear signals from the central bank.
Policymakers ultimately voted 5-4 in favor of the cuts, with Gov. Andrew Bailey saying the committee would proceed cautiously.
As of 8:15 a.m. in London, markets were pricing in a 61% chance of a 25 basis point cut in the key rate at the August meeting, although UK inflation The Bank of England’s 2% target has been reached for two consecutive months.
Since August 2023, bank interest rates have remained at a 16-year high of 5.25%.
The Bank of England typically provides less forward guidance than some other central banks, but Thursday’s decision was seen as a particularly close call given that its communications have been constrained in the last six weeks due to the UK election. Decide.
A blurry bus passes the Bank of England in the City of London on February 7, 2024 in London, England.
Mike Camp | In Pictures | Getty Images
Some of the Bank’s more hawkish policymakers have been vocal about their concerns about wage growth and sticky services inflation, despite recent votes showing two votes in favor of a cut and seven in favor of keeping rates on hold.
The decision will be announced at noon UK time, followed by a press conference. There will also be a quarterly monetary policy report released on Thursday, which will include growth and inflation forecasts.
