BoE holds rates at 4.75%, warns of inflation risks

The Bank of England kept its benchmark interest rate unchanged at 4.75% during its December 2024 meeting, aligning with market expectations.

BoE holds rates at 4.75%, warns of inflation risks

This decision was supported by rising CPI inflation, wage growth, and some inflation expectations, which heightened concerns about persistent inflation. However, three policymakers advocated for a 25bps rate cut to 4.5%, citing weak demand and a softening labor market. The central bank emphasized that a gradual approach to easing monetary policy remains appropriate.

BoE pledges prolonged tight policy to hit 2% inflation target

It reiterated that restrictive monetary policy must be maintained sufficiently long to mitigate risks of inflation failing to return sustainably to the 2% target in the medium term. Future policy decisions will continue to be made on a meeting-by-meeting basis.