Members of the Bank monetary policy committee (MPC) voted by a majority of 5–4 to maintain bank rate at 3.75%. Four members voted to reduce the rate by a quarter of a per cent to 3.5%, but lost the argument.
However, a window was left open for a possible rate cut in the next few months with the Bank of England meeting notes stating: ‘Although above the 2% target currently, CPI inflation is expected to fall back to around the target from April, owing to developments in energy prices including from Budget 2025.’
Inflation concerns shaped the decision to keep interest rate at 3.75%, with the Bank of England stating: ‘The extent of further easing in monetary policy will depend on the evolution of the outlook for inflation. The restrictiveness of policy has fallen as bank rate has been reduced by 150 basis points since August 2024. On the basis of the current evidence, bank rate is likely to continue on a gradual downward path. But judgements around further policy easing will become a closer call.’
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