As anticipated, the Bank of England (BoE) has decided to maintain its current interest rates for the fourth consecutive time. This decision aligns with the recent announcement made by the U.S. Federal Reserve regarding their own interest rates.
The BoE has chosen to keep the interest rates unchanged at 5.25 percent, as the majority of the Monetary Policy Committee (MPC) voted against altering the country’s interest rate.
Read more: Bank of England raises interest rates by 25 basis points
The inflation rate in Britain unexpectedly rose to 4 percent year-on-year in December 2023. This increase was driven by higher prices of tobacco and alcohol. Notably, this marked the first monthly rise in the consumer price index in ten months, specifically since February 2023.
Andrew Bailey, governor of the Bank of England, stated that the bank would require concrete signs and indicators that support a case for lowering interest rates before making a similar decision.
Bailey further added that the BoE will continue to assess economic conditions to determine the appropriate duration for maintaining interest rates at their current levels.
Similarly, the U.S. Federal Reserve decided to keep its interest rates unchanged for the fourth consecutive time on Wednesday.
The Fed’s interest rates have remained at 5.25 and 5.5 percent, making them the highest interest levels in the world’s largest economy in nearly 22 years. However, in contrast to the Bank of England, the Fed’s monetary policy statement indicated a significant possibility of reducing interest rates in the upcoming months. This move aims to address concerns about inflation and other risks to the economy.
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