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Bank of England leaves UK interest rates on hold, as expected

Follows lead of US and Eurozone peers but the latest inflation projections and vote split raise doubts over timing of likely cuts this year.

01 February 2024

Another day, another central bank policy decision and another decision to do nothing. The Bank of England (BoE) opted to leave the policy rate at 5.25%, albeit that the decision was not unanimous, with two of the nine members voting to move rates higher and one voting to cut. Their outlook on inflation is skewed to the upside in their new assessment of the broader economy and while they see inflation hitting the 2% target in the second quarter of this year, they expect it to move higher once again and not return to target for almost another two years.

Similar to the Federal Reserve yesterday, the BoE’s statement on policy rates implies that the peak in rates is in place and rates are only going down from here - once confidence is there that inflation is under better control. Confidence needs to continue to build and the market puts the date for the first rate cut at the June central bank meeting.

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Charles Hepworth

Investment Director
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