UK Base Interest Rate Held Steady at 5.25%

The Bank of England, the central bank of the United Kingdom, has paused its series of interest rate hikes that had continued for 14 consecutive times since the end of 2021 by keeping the base rate unchanged.

[Image source=Reuters Yonhap News]

On the 21st (local time), the Bank of England (BOE) announced at its monetary policy meeting that it would hold the base interest rate steady at 5.25% per annum. The BOE had been steadily raising rates from 0.1% per annum in December 2021.

The BOE stated that among the monetary policy committee members, opinions were closely divided at 5 to 4 between maintaining the current rate and raising it by 0.25 percentage points.

On this day, the BOE also downgraded its economic growth forecast for the UK. While financial markets had recently predicted a 0.25 percentage point rate increase, the outlook for a hold was strengthened after inflation fell to its lowest level in 18 months the previous day.

Bloomberg reported that as the US Federal Reserve also held rates steady, the probabilities of a rate hike and a hold predicted by financial markets that morning were each 50%.