Bank of England keeps interest rates on hold, but shows signs of cuts to come

The Bank of England has voted to keep interest rates unchanged, but showed what was perhaps the clearest sign in years that cuts could come in the months ahead.

Eight members of the Monetary Policy Committee said rates should be kept at the current 5.25% level at least until it meets next time. “We’re not yet at the point where we can cut interest rates, but things are moving in the right direction.” The Bank is tasked to keep inflation under control, and interest rates are its main tool to do so. When rates go up, it tends to put downwards pressure on inflation.

The data also showed that inflation in the services sector, in the Bank’s words, “remains elevated at 6.1%”.At the MPC’s meeting there had been some disagreement within the eight-person majority which voted to keep rates unchanged.

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