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Bank of England maintains benchmark rate at 5.25 percent

Xinhua | Updated: 2024-06-21 04:39
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LONDON -- The Bank of England (BoE) has held its benchmark interest rate at 5.25 percent, the United Kingdom's (UK) central bank said in a statement on Thursday.

This is the seventh time in a row that the central bank has decided to maintain this rate.

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

The BoE pointed out that twelve-month consumer price inflation (CPI) fell to 2 percent in May, which is in line with the central bank's target, and indicators for short-term inflation expectations have also continued to moderate, particularly for households.

Services CPI was 5.7 percent in May, still higher than projected, but it "did not alter significantly the disinflationary trajectory that the economy was on," the statement said.

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

According to the statement, the rate-setters judged that the labor market continues to relax, but it remains relatively tight by historical standards.

MPC members who voted to hold the rate at the 16-year high believed that more evidence of diminishing inflation persistence was needed before reducing the degree of monetary policy restrictiveness.

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