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PRIVACY
Economic Development

Bank of England leaves interest rates unchanged at 5.25%

Decision comes after lower-than-expected inflation figures

Governor of the Bank of England Andrew Bailey

The Bank of England has left interest rates unchanged at 5.25% following this week's lower-than-expected inflation figures.

The bank's Monetary Policy Committee voted by a majority of 5–4 to maintain the bank rate at 5.25%. Four members preferred to increase Bank Rate by 0.25 percentage points, to 5.5%.

It also said the º£½ÇÊÓÆµ economy is now expected to grow at a weaker rate than previously expected amid “subdued” activity linked to the recent rise in borrowing costs.

In the latest MPC meeting, bank staff said they expect º£½ÇÊÓÆµ gross domestic product (GDP) to rise by “only 0.1%” in the third quarter of 2023, after predicting a 0.4% rise in last month’s meeting.

“Although some of this downside news could prove erratic, underlying growth was likely to be weaker than the 0.25% per quarter built into the August projection for the second half of 2023,” the latest meeting minutes said.

Andrew Bailey, governor of the Bank of England, said: “Inflation has fallen a lot in recent months and we think it will continue to do so. That’s welcome news.

“But there is no room for complacency.

“We need to be sure inflation returns to normal and we will continue to take the decisions necessary to do just that.”