MNI: BOE Leaves Rates Unchanged at 5.25%, Guidance Unchanged
The Bank of England left interest rates unchanged at 5.25% in June, with 7 of the Monetary Policy Committee members voting for Governor Andrew Bailey's proposal. However, as in May, 2 members -- Dave Ramsden and Swati Dhingra -- again voted for a 25 bps cut.
Although headline inflation fell to 2.0% in May, in line with the MPC's target for the fist time since July 2021, policymakers noted indicators of inflation persistence have continued to moderate, but "remain elevated".
Guidance in the policy statement was unchanged, with the Committee again noting that monetary policy will need to remain restrictive for sufficiently long to return inflation sustainably to 2%. The MPC has said since November that policy needs to be restrictive for an extended period.
The MPC again said it is prepared to adjust policy as warranted to return inflation to target and will monitor closely indications of persistent inflationary pressure.
However, adding to last month's statement, the members said in August, they will consider "all of the information available and how this affects the assessment that the risks from inflation persistence are receding".
Although the meeting fell within the campaign period ahead of the July 4 General Election, the MPC said the proximity of the vote had not impacted their decision-making process. However, Bank officials will remain in 'purdah' until after the election, barring statutory announcements.
In a statement alongside the release, Governor Andrew Bailey said "It's good news that inflation has returned to our 2% target. We need to be sure that inflation will stay low and that's why we've decided to hold rates at 5.25% for now".