Bank of England halts run of interest rate hikes as economy slows

Bank of England halts run of interest rate hikes as economy slows

The Bank of England decided to pause its series of interest rate increases due to a slowdown in the British economy. However, the bank emphasized that it was not assuming the recent decline in inflation would continue. The Monetary Policy Committee voted 5-4 to keep the Bank Rate at 5.25%, with four members in favor of raising rates to 5.5%. This marked the first time since December 2021 that the Bank of England did not raise borrowing costs. The committee acknowledged the impact of tighter monetary policy on the labor market and the overall economy. It also revised its forecast for economic growth in the July-September period to 0.1% and highlighted weaknesses in the housing market. The Bank of England anticipated weaker growth for the rest of the year and expressed concerns about the sustainability of record growth in workers’ pay. Despite expecting a significant decrease in CPI inflation in the near term, the bank noted that services inflation was likely to remain elevated. The decision to pause rate hikes aligned with the U.S. Federal Reserve’s choice to keep borrowing costs unchanged. The European Central Bank, on the other hand, raised rates but hinted that it might be the last increase for now. The Bank of England reiterated its readiness to raise borrowing costs if persistent inflationary pressures emerged. Governor Andrew Bailey emphasized the need to ensure inflation returns to normal and stated that the bank would make the necessary decisions to achieve this goal. Additionally, the bank announced an accelerated plan to reduce its stockpile of government bonds by 100 billion pounds over the next 12 months. This reduction would be achieved through a combination of sales and allowing bonds to mature, bringing the total to 658 billion pounds.

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News TeamHi, I'm Alex Perez, an experienced writer with a focus on lifestyle and culture news. From food and fashion to travel and entertainment, I love exploring the latest trends and sharing my insights with readers. I also have a strong interest in world news and business, and enjoy covering breaking stories and events.

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