Boe Announces Review Of Interest Rate

Boe Announces Review Of Interest Rate by Andrew Blumer last updated on February 13, 2024

Bank Of England Announces Review Of Interest Rate Policy

Thursday's session is almost complete, with the Bank of England keeping the interest rates unchanged. A look into the past shows that the current interest rate in the United Kingdom is at a 16-year high, which is a record in itself.

However, the Bank of England recently announced that it will review the interest rates. This sudden change in the stance came as the inflation has officially dipped below the 2% mark. A member of the BoE has already cast a vote to lower the interest rate in the UK.

Interest Rate Steady At 5.25% For Now

At the policy meeting, the members of the BoE remained mixed on whether the interest rates needed to be lowered or kept at the current levels. As a result, a decision was made to keep the policy under review for now.

According to details, six members voted for no change in interest rate, which is currently at 5.25%. Another two members voted for a 25 bps rate hike, while another voted for a rate cut of 25 bps.

The bottom line is that 8 out of 9 members didn't want any rate cuts, while one voted otherwise. Despite this, the UK's bond yields and the GBP showed a modest increase after the news. According to Quilter Investors, the recent meeting has revealed signs of a potential move leading to rate cuts.

According to the BoE governor, the central bank needs solid evidence that inflation has permanently crossed below the 2% target.

Another significant development was that the BoE should have also mentioned something about further tightening at the meeting. So, that's also a factor which hints at a changed path.

Although the BoE is still slightly ambiguous about this rate policy, the ECB and Federal Reserve officials are more transparent about their agenda.