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The Bank of England (BoE) has voted to hold interest rates at 4.5%, having cut the rate last month to its lowest level since June 2023.
At its meeting ending on 19 March, the bank’s monetary policy committee (MPC) voted by a majority of 8–1 to maintain the rate at 4.5%, with one member preferring to reduce it by 0.25 percentage points, to 4.25%.
In today’s announcement, the bank reiterated there has been “substantial” progress on disinflation over the past two years, as noted last month, with the progress allowing the MPC to “withdraw gradually some degree of policy restraint, while maintaining bank rate in restrictive territory so as to continue to squeeze out persistent inflationary pressures”.
However, since the MPC’s last meeting, it warned that global trade policy uncertainty has “intensified”, with financial market volatility rising globally amid the United States’ tariff announcements and other geopolitical uncertainties.
While it noted that UK GDP growth estimates have been “slightly stronger” than expected at the time of the February report, business survey indicators continue to suggest weak growth, “particularly in employment intentions”.
Based on the bank’s view of the medium-term outlook for inflation, it said a “gradual and careful approach to the further withdrawal of monetary policy restraint is appropriate”.
The bank had previously held interest rates at 4.75% in December after inflation rose for the second month in a row to 2.6% in November, marking the highest level of inflation in eight months.
In November, the BoE had also voted to cut interest rates, with rates cut to 4.75%, down from a previous rate of 5%.
It had previously decided to hold interest rates at 5% in September, having lowered them for the first time in four years in August.
