"In a closely split decision, the Monetary Policy Committee (MPC) voted 5-4 to maintain the current rate, with Governor Andrew Bailey casting the deciding vote. Bailey said he would "prefer to wait" before supporting any further loosening of monetary policy, citing ongoing concerns about inflation expectations among households and elevated wage growth. The Bank expects inflation to remain above its 2% target until the second quarter of 2027, forecasting a gradual decline from its current 3.8% level."
"Bailey said that while inflation risks were "less pressing" than in August, the case for easing policy had not yet been proven. "Upside risks to inflation have become less pressing since August, and I see further policy easing if disinflation becomes more clearly established in the period ahead," he said. "Rather than cutting Bank Rate now, I would prefer to wait and see if the durability in disinflation is confirmed in upcoming economic developments this year.""
The Bank of England voted 5-4 to hold Bank Rate at 4%, with Governor Andrew Bailey casting the deciding vote and signalling caution on immediate easing. Officials expect consumer price inflation to stay above the 2% target until the second quarter of 2027, with a gradual decline from the current 3.8% level. The Bank maintained growth forecasts of 1.4% for 2025 and 2026, slightly raised the current year but trimmed next year amid weakening demand and a slowing labour market. Committee views split over cooling job indicators versus elevated 4.9% wage growth, and policy guidance removed the word "careful," pointing to a gradual path ahead.
Read at Business Matters
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