Bank of England keeps rates at 5.25% despite inflation hitting target

From Forbes: 2024-06-20 16:03:25

The Bank of England has announced that it will maintain borrowing costs at 5.25% for now, following the US Federal Reserve’s decision to also keep rates steady. Inflation in the UK fell to 2% in the year to May, hitting the Bank’s target. Experts are divided on whether a rate cut will happen in August or November. Meanwhile, the US Fed has held rates at 5.25-5.5%, citing improved balance in achieving employment and inflation goals.

The Bank of England’s decision to hold borrowing costs at 5.25% comes after UK inflation dropped to 2%, its lowest level since July 2021. The Bank has been under pressure to reduce rates due to rising inflation levels during 2022 and 2023. However, with inflation now at the target level, a rate cut may not be imminent. In the US, the Federal Reserve has also kept rates at a 23-year high of 5.25-5.5%, citing uncertainties in the economic outlook.

The US Federal Reserve has decided to maintain interest rates in a target range of 5.25-5.5%, a 23-year high, as it continues to combat elevated inflation. The Fed believes the risks to achieving its employment and inflation goals have improved, but the economic outlook remains uncertain. Despite a slight dip in annual US inflation to 3.3% in May, the Fed did not opt for an immediate rate cut.



Read more at Forbes: Bank Rate Held At 5.25% Despite Inflation Hitting Target – Forbes Advisor UK