Bank of England keeps base rate at 5.25 per cent

Photo: Xinhua/Li Ying

LONDON (Xinhua) -- The Bank of England (BoE) has kept its key interest rate at 5.25 %, the central bank of the United Kingdom (UK) said in a statement on Thursday. This is the seventh time in a row that the central bank has decided to maintain the rate.

At Wednesday's meeting, the BoE's Monetary Policy Committee (MPC) voted by a majority of seven votes to two to maintain the rate. Two members preferred to cut it by 0.25 percentage point to 5 %.

The BoE pointed out that 12-month consumer price inflation (CPI) fell to 2 % in May, in line with the central bank's target, and indicators of short-term inflation expectations also continued to moderate, especially for households.

The consumer price index for services reached 5.7 % in May, still higher than expected, but "it has not significantly altered the disinflationary trajectory the economy is on", the statement said.

The UK economy also appears to have grown more strongly than expected in the first half of this year.

According to the statement, rate-setters judged that the labour market was continuing to ease but remained relatively tight by historical standards.

The MPC members who voted to keep the rate at a 16-year high believe that more evidence of declining persistent inflation is needed before reducing the degree of monetary policy tightness.

Xinhua/gnews.cz-roz_07