The Bank of England decided on Thursday to maintain its benchmark interest rate at 5.00 percent, following a quarter-point cut last month. Additionally, the bank extended its bond reduction plan for another year.
The Monetary Policy Committee (MPC), chaired by Andrew Bailey, voted 8-1 in favor of holding the Bank Rate steady at 5.00 percent. In contrast, during their August meeting, the vote was quite narrow at 5-4, resulting in a decision to cut the rate by a quarter point from a 16-year peak of 5.25 percent.
Committee member Swati Dhingra cast the dissenting vote, advocating for a reduction of the rate by 0.25 percentage points to 4.75 percent.
The MPC also reached a unanimous decision to reduce the stock of UK government bond purchases by GBP 100 billion over the next twelve months, bringing the total to GBP 558 billion.
"In the absence of significant developments, a gradual approach to easing policy remains appropriate," the bank stated.
Bank staff have revised their forecast for UK economic growth to 0.3 percent in the third quarter, a slight downgrade from the 0.4 percent projected in August.
Furthermore, inflation is projected to increase to approximately 2.5 percent towards the end of this year, as the previous declines in energy prices from last year are phased out of the annual comparison.
