The pound sterling and British government bond prices fell after the decision to fix interest rates was issued
Proven Bank of England Central interest rate The president is at a 16-year high of 5.25%.today is Thursday Ahead of the July 4 election, but some policymakers said their decision not to cut interest rates was now “well balanced.”
The Monetary Policy Committee at the Bank of England voted by 7 votes to 2 in favor of keeping interest rates unchanged, in line with the expectations of economists in a Reuters poll. Deputy Governor Dave Ramsden and external MPC member Swati Dhingra remained the only policymakers to support the reduction to 5%.
Bank of England Governor Andrew Bailey said in a statement alongside the decision that it was “good news” that the latest data showed inflation had returned to its 2% target, but that it was too early to cut interest rates.
He said: “We need to make sure that inflation remains low and that is why we decided to keep interest rates at 5.25% for the time being.”
Bailey’s statement differs from last month, when he said he was “optimistic” that the data was moving in the right direction for lower interest rates.
The British pound fell against the US dollar after the announcement and British government bond prices fell as investors saw a greater opportunity for an early interest rate cut. Markets expected an 88% chance of a first quarter-point cut by the September meeting, up from 74% before Thursday’s decision.
The Bank of England’s vote follows a long-awaited decision by the European Central Bank earlier this month to start cutting interest rates, while financial markets do not expect the US Federal Reserve to lower borrowing costs until late this year.
A Reuters poll of economists published last week showed that most expect a rate cut on August 1 after the Bank of England’s next interest rate decision.
