Bank of England holds interest rate at 4.25%

The Bank of England has announced that it is holding the interest rate at 4.25% today (Thursday 19th June).

Interest rates have been held at 4.25% today in a widely predicted decision as inflation remains at 3.4%, the highest level of price rises for more than a year and well above the target rate of 2%.

Governor of the Bank of England Andrew Bailey said "Interest rates remain on a gradual downward path, although we've left them on hold today.

"The world is highly unpredictable. In the UK we are seeing signs of softening in the labour market.

"We will be looking carefully at the extent to which those signs feed through to consumer price inflation."

In May, the Bank cut the interest rate from 4.5% to 4.25% - the fourth reduction in a year. At the time, the Bank's Monetary Policy Committee (MPC) hinted at more reductions to follow.

Although no changes have been made today, many economists believe there will be two more interest rate cuts by the Bank of England this year, though some other experts say they are only expecting one more reduction.

Interest rates play a crucial role in determining borrowing costs for individuals, businesses, and the government, as well as influencing returns for savers.

The Monetary Policy Committee consists of nine members—five women and four men—including economists and key figures from the Bank.

Meeting eight times annually, the committee's decisions significantly impact mortgage rates, business investments, and overall economic activity. Its main goal is to use interest rates to keep inflation at the government's target of 2%.

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