Bank of England Holds Rates, Hints at Coming Cut

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Feb 01, 2024

Image copyright: WPA Pool/Pool/Getty Images News via Getty Imagesstory last updated Feb 02

The Facts

The Bank of England has held interest rates at the current level of 5.25%, the highest since the 2008 financial crisis, for a fourth consecutive time but signaled that a cut is likely in the near future based on its forecast that inflation will temporarily fall below the 2% target within months.
This comes as its Monetary Policy Committee (MPC) voted 6-3 in favor of keeping borrowing costs steady, with two members supporting another quarter-point hike and one voting for a reduction.

The Spin

Establishment-critical narrative

When the Bank of England had to increase rates to keep inflation in line with the 2% target, its MPC made ordinary people pay the price for its delay in increasing interest rates. Now, despite warning signs that this restrictive monetary policy is plunging the economy into a recession, the MPC insists on not lowering the base rate. Once again, the MPC has failed the British people.

Evening Standard

Pro-establishment narrative

The Bank of England has tightened its monetary policy to ease the pace of price growth, successfully bringing inflation to 4% in December — down from the 40-year high reached in October 2022. As inflation is now expected to temporarily fall back to the 2% target by the summer, cuts in interest rates are already on the horizon. Yet, more evidence is needed to ensure that this is the right move, so rates have rightfully been held.