Bank of England moves closer to first rate cut since 2020

Prices at the Pumps - May 8, 2024 #saltwire #pricesatthepumps #gaspricesLONDON, May 9 - The Bank of England took another step towards lowering interest rates, as a second official backed a cut and Governor Andrew Bailey said he was"optimistic that things are moving in the right direction".

He has told voters that the economy is turning a corner but is struggling to reduce the opposition Labour Party's big opinion poll lead before an election later this year. "On that basis, the Committee will keep under review for how long Bank Rate should be maintained at its current level." But the BoE has remained on guard because of still-strong wage growth and services price inflation which threaten to push inflation back above 2%."We need to see more evidence that inflation will stay low before we can cut interest rates," he said in a statement."I'm optimistic that things are moving in the right direction.

Minutes of the BoE's May meeting showed differences between the seven MPC members who voted to keep rates on hold around how persistent inflation pressures would be, and how much more evidence of a slowdown was needed to justify a rate cut.

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