Monetary Policy Remains Unchanged for Fourth Meeting
The Bank of England has kept interest rates at 3.75%, marking the fourth consecutive meeting where the Monetary Policy Committee chose not to make any change. Policymakers continue to balance inflation risks with signs of easing price pressures.
Energy Prices Keep Inflation Risks Alive
Governor Andrew Bailey noted that recent falls in oil prices are a positive sign. However, he warned that earlier spikes in global energy costs, linked to ongoing conflict in the Middle East, are still feeding inflation through the economy.
He explained that past increases in energy prices are already building pressure on consumer costs. These effects are expected to continue influencing inflation in the months ahead.
Inflation Outlook Shows Slight Improvement
The Bank stated that oil prices remain higher than before the conflict and continue to move unpredictably. Even so, inflation forecasts for the end of the year are slightly lower than earlier estimates made in April.
Officials stressed that future decisions on interest rates will depend on how long energy price shocks last and how strongly they affect wages and business costs.
Focus on Price Stability and 2% Target
Bailey added that controlling inflation remains the Bank’s main goal. He emphasized that the institution must prevent temporary energy shocks from turning into long term inflation above the 2% target.
