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Bank of England freezes interest rate as inflation stays high

By AFP

February 1, 2024 08:08 PM


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The Bank of England froze its key interest rate Thursday for a fourth meeting in a row, matching US Federal Reserve policy, as high inflation prevents cuts to borrowing costs.

The BoE said in a statement it had left its rate at 5.25 per cent, the highest level for 16 years, following a regular policy meeting.

BoE governor Andrew Bailey said there was a "need to see more evidence that inflation is set to fall" to the bank's "2.0-per cent target and stay there before we can lower interest rates".

UK annual inflation stands at 4.0 per cent after inching up from 3.9 per cent, according to the latest official data.

But it has fallen sharply from a 41-year peak of 11.1 per cent in October 2022.

The BoE hiked its key interest rate 14 times between late 2021 and the second half of last year.

Global inflationary pressures started to build after Covid lockdowns were lifted before sky-rocketing when energy prices soared following the invasion of Ukraine by major oil and gas producer Russia.

The BoE on Thursday forecast that UK annual inflation could fall to 2.0 per cent in the Spring before climbing again.

 

 


AFP


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