May 2024: Interest Rate Remains At 5.25%

Today the Bank of England reported that they will maintain the current interest rate at 5.25%.

The Bank Of England reported:

At its meeting ending on 8 May 2024, the MPC voted by a majority of 7–2 to maintain Bank Rate at 5.25%. Two members preferred to reduce Bank Rate by 0.25 percentage points, to 5%.

The Bank of England’s Monetary Policy Committee (MPC) sets monetary policy to meet the 2% inflation target, to help sustain growth and employment. The Bank stated that inflation was tracking toward its 2% target and projected it to decrease to 1.6% within two years, suggesting the possibility of future interest rate cut as soon as June.

Andrew Bailey, Bank Of England governor, said:

“Before our next meeting in June, we will have two full sets of data – for inflation, activity and the labour market – that will help us in making that judgment afresh.”

“We’ve had encouraging news on inflation and we think it will fall close to our 2% target in the next couple of months...We need to see more evidence that inflation will stay low before we can cut interest rates. I’m optimistic that things are moving in the right direction.”

The Bank's latest forecast predicted:

• Inflation to fall to the Bank's 2% target in the coming months and to 1.9% in 2026.

• Economic growth of 0.4% for the first three months of 2024 and 0.2% from April to June

Source: Bank Of England