Bank of England halts run of interest rate hikes

10 個月前

STORY: The Bank of England stopped its long run of interest rate hikes on Thursday (September 21).

It made the move as Britain's economy slowed.

The central bank's Monetary Policy Committee only voted narrowly - 5-4 - to keep the Bank Rate at 5.25%.

It was the first time since December 2021 the bank didn't raise borrowing costs.

The decision comes after data released Wednesday (September 20) showed August saw a surprise fall in inflation.

Britain's economy has been hurt by the highest inflation in the Group of Seven advanced economies.

That has come despite weak growth and risked a recession.

The Bank of England also cut its forecast for economic growth in the July-September period to just 0.1%.

That was down from August's forecast of 0.4% and noted clear signs of weakness in the housing market.

It further said growth for the rest of the year was likely to be weaker than previous forecasts.

It also noted record growth in workers' pay was not backed up by other measures of the labor market, which suggested policymakers expected it to slow down soon.

The Bank of England isn't taking anything for granted.

It repeated its message that it was prepared to raise borrowing costs again if needed to help get inflation down to its target of 2%.

The decision to pause rate hikes came a day after the U.S. Federal Reserve also kept borrowing costs on hold.

Last week, the European Central Bank raised rates, but suggested it might be the last move for now.