Prices

Bank of England Keeps Rates at 15-year High

NOV 2 2023·Updated NOV 3 2023

Story

Image credit: Henry Nicholls - WPA Pool/Getty Images News via Getty Images

The Facts

The Bank of England (BoE) has decided to hold interest rates at 5.25% — its highest level in 15 years — as it warned that the UK economy was unlikely to see growth until 2025.
BBC News
The BoE's Monetary Policy Committee 6-3 decision is its second pause in a row after 14 consecutive rate hikes. In September, the bank voted 5-4 for its first rate halt since December 2021.
Evening Standard
In a statement following the decision, the MPC claimed that it would be "watching closely" to see if further rate increases were needed, also commenting that it was "much too early" to consider rate cuts. All three committee members who did not vote for a rate pause were in favor of a quarter-point rate increase to 5.5%.
Independent
The BoE also estimated that UK inflation was to drop below 5% in October — with last month's data to be released at the end of November. BoE Governor Andrew Bailey claimed that "Higher interest rates are working and inflation is falling."
Sky News
Despite this, Bailey affirmed that there was "absolutely no room for complacency." Inflation's annual rate stood at 6.7% in the year to September, with the central bank claiming monetary policy would have to remain "sufficiently restrictive for sufficiently long" to hit its 2% target.
CNBC
The BoE's 2% target is forecasted to be reached at the end of 2025 — 6 months later than previously estimated. The decision by the BoE follows recent decisions both by the European Central Bank and the US Federal Reserve to also hold interest rates.
Reuters

Sources Split

LEFT

CENTER

RIGHT

ESTAB
CRIT

CENTER

PRO
ESTAB

The Spin

Pro-establishment narrative

Decisions by the BoE will likely continue to be hard-fought within its committee as the central bank walks a tightrope between tackling inflation and avoiding a recession. So far, the UK has avoided the doomsday predictions for its economy, but challenges inevitably remain as estimates for targeted inflation levels remain deep into 2025.

Spectator (UK)

Establishment-critical narrative

With growth slowing and unemployment rising, the decision to keep interest rates at their current level is a further signal of the UK government's stagnant and ineffective policymaking. The BoE lacks transparency over inflation modeling and its long-term plan, as job outlooks and quality of life continue to suffer.

Morning Star