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2025-09-18 19:17:14
Bank of England Holds Interest Rates on Hold and Slows Balance Sheet Reduction: ⑴ The Bank of England's Monetary Policy Committee voted 7-2 to maintain the base rate at 4%, with two members voting for a 25 basis point cut to 3.75%. The committee also voted 7-2 to slow the pace of quantitative tightening, reducing government bond holdings by £70 billion over the next year, bringing holdings to £488 billion. ⑵ Policymakers noted that inflation has shown signs of decline, despite the impact of previous tightening policies, but remains above target. The Consumer Price Index (CPI) was 3.8% in August and is expected to rise slightly in September before gradually declining to around 2%. Wage growth, while still high, is moderating, and service sector inflation remains stable. ⑶ The Bank also noted that medium-term inflation risks remain upside, but current economic growth is weak, the labor market is loose, and there is spare capacity. Looking ahead, the committee emphasized its commitment to a gradual, data-driven approach and the maintenance of policy flexibility to address potential changes.
