BoE Keeps Rates Steady
The Bank of England voted 7–2 to keep Bank Rate unchanged at 4%, with two members favoring a 25 bps cut to 3.75%. The MPC also voted 7–2 to slow quantitative tightening, reducing gilt holdings by £70 billion over the next year, to £488 billion. Policymakers highlighted progress in disinflation after past shocks, supported by restrictive policy, although inflation remains above target. CPI stood at 3.8% in August and is expected to rise slightly in September before trending back toward 2%.
Wage growth, while still elevated, has eased and is forecast to slow further, while services inflation has remained steady. The MPC flagged upside risks to medium-term inflation but noted subdued GDP growth, a loosening labor market, and slack in the economy. Looking ahead, the committee stressed a gradual, data-driven approach, with no pre-set path for rate cuts, maintaining flexibility to respond to future developments.(ads)
Source: Trading Economics
