Bank of England maintains base rate at 5.25%

Written by Michael Griffiths

15/12/2023

The Bank of England (BoE) has confirmed it is keeping its base rate at 5.25%, the third time in a row the central bank has opted to hold interest rates.

At its latest meeting, the Monetary Policy Committee (MPC) at the BoE voted by a majority of six to three in favour of maintaining interest rates at 5.25%, keeping them at their highest level in 15 years.

Three Committee members, however, voted for a 0.25% increase, which would have taken interest rates to 5.5%.

October’s pause in the recent rate hiking cycle ended a run of 14 successive base rate increases, which had seen the BoE gradually raise rates at every meeting since December 2021. Rates were sitting at a historic low of 0.1% this time two years ago.

The flurry of interest rate hikes has formed a large part of the BoE’s efforts to curb the rate of inflation, which fell to 4.6% in October, having come down from 6.7% in the year to September, according to figures published by the Office for National Statistics (ONS).

In the Bank’s latest report, it stated that CPI inflation is expected to “remain near to its current rate around the turn of the year”.

“Given the significant increase in bank rate since the start of this tightening cycle, the current monetary policy stance is restrictive,” the BoE added.

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