The Bank of England’s Monetary Policy Committee (MPC) has held interest rates at 4.25% due to a “highly unpredictable” world as energy prices are rising.
The MPC said they will take a “gradual and careful approach” to reduce borrowing costs.
The bank’s governor Andrew Bailey said, “Interest rates remain on a gradual downward path, although we’ve left them on hold today.
“The world is highly unpredictable.”
Bailey said there are “signs of softening in the labour market” including easing wage growth and slower hiring.
Sam Miley, Head of Forecasting and Thought Leadership at CEBR said, “In line with Cebr’s expectation, the Bank of England has today held the base rate at 4.25%.
“The UK is not out of the woods in the fight against price growth. Food price inflation has surged in recent months, energy prices are up, and services inflation remains elevated, indicating a broad base of pressures. There are also several upside risks to prices, including increased domestic labour costs and potential spillovers from recent geopolitical uncertainty.
“On the whole, we expect the Bank to maintain a cautious approach to monetary easing, implementing just one further rate cut this year.”
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