Bank of England keeps interest rates at 4.5%

Written by Michael Griffiths

20/03/2025

The Bank of England (BoE) has opted to hold interest rates at their current level of 4.5%.

The move follows last month’s decision by the central bank to cut rates from 4.75%, and two other cuts towards the end of last year which brought down the base rate from a recent peak of 5.25%.

At the latest meeting, the nine members on the BoE’s Monetary Policy Committee (MPC) voted by a majority of eight to one to maintain the base rate at 4.5%. One member was in favour of another cut by 0.25%, which would have taken rates to 4.25%.

In the MPC’s report published today, it stated that that the Committee’s “evolving view” of the medium-term outlook for inflation means it is taking a “gradual and careful approach” to monetary policy. This comes as inflation increased to 3% in January, up from 2.5% in December, which was slightly higher than the MPC had expected in its report last month.

The latest report also stated that while global energy prices have fallen back recently, they remain higher than last year, and as a result the BoE said inflation is still projected to rise further, to around 3.75% in Q3 this year.

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