The Bank of England’s decision to keep the rate on hold at 5% follows the US Federal Reserve’s decision to cut its base rate by an unusually large half-point, to help bolster the jobs market, which has shown clear signs of slowing.
The Bank of England (BoE) has held the interest rate steady at 5% for this month. Members of the Monetary Policy Committee (MPC) voted by 8-1 to keep it unchanged.
The decision was not a surprise as many analysts believed it would be premature for the BOE to make another cut so soon.
The bank lowered the policy rate to its present level in August, cutting it from a 16-year high of 5.25% and marking the first rate cut in more than four years.
The MPC narrowly passed that decision with a 5-4 vote, signalling a cautious approach moving forward.
The economic landscape indicates that the BOE is likely to delay a second rate cut until November.
Inflation, wage growth, and labour market conditions are the three key indicators the bank monitors when adjusting monetary policy.
While all three areas showed signs of easing, recent data was not considered sufficient justification for a further rate cut in September, analysts said earlier.
