Financial News: BoE Holds Key Rate As Expected

BoE Holds Key Rate As Expected

09/19/2024 - 07:40:00 (RTTNews)

(RTTNews) - The Bank of England decided to maintain its benchmark rate on Thursday after a quarter-point cut last month and also extended its bond reduction plan for another one year.

The Monetary Policy Committee headed by Andrew Bailey voted by a majority of 8-1 to hold the Bank Rate at 5.00 percent.

At the August meeting, the MPC had voted in a tight 5-4 vote to cut the rate by a quarter point from a 16-year high of 5.25 percent.

Swati Dhingra voted to reduce the rate by 0.25 percentage points to 4.75 percent.

Today, the MPC unanimously voted to reduce the stock of UK government bond purchases by GBP 100 billion over the next twelve months, to a total of GBP 558 billion.

"In the absence of material developments, a gradual approach to removing policy restraint remains appropriate," the bank said.

Bank staff forecast the UK economy to grow 0.3 percent in the third quarter, which was weaker than the 0.4 percent estimated in August.

Inflation is expected to increase to around 2.5 percent towards the end of this year as declines in energy prices last year fell out of the annual comparison.

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