Bank of England holds rates in tight vote, signals possible cut next month
The Bank of England (BoE) has voted narrowly to keep interest rates unchanged at 4.0%, but signs suggest a rate cut could come as soon as December.
In a close 5-4 split, Governor Andrew Bailey sided with the majority to hold rates steady, though the bank’s statement indicated he may soon support a reduction. Bailey said there was “value in waiting for further evidence” that inflation is on a sustained downward path, News.Az reports, citing Reuters.
The BoE said it believes UK inflation has peaked, noting that weaker growth and a slowing jobs market are helping ease price pressures. Inflation currently stands at 3.8%, the highest among G7 economies.
While the decision was widely expected, the tight vote and revised guidance—hinting that rates are “likely to continue on a gradual downward path” if disinflation persists—strengthened investor bets on a cut in mid-December.
Markets now see a 60% chance of a rate reduction at the next Monetary Policy Committee meeting, especially with new inflation and jobs data due before then and Finance Minister Rachel Reeves’ budget expected to slow growth further.
The BoE forecasts 1.5% economic growth for 2025 and expects inflation to return to its 2% target by mid-2027.
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