The Bank of England voted by a majority of 8-1 to hold interest rates at 5.25%

The Bank of England has left interest rates unchanged at 5.25% as its governor said things are “moving in the right direction” for the economy.

The Bank’s Monetary Policy Committee (MPC) voted by a majority of 8-1 to maintain the rate at 5.25%, keeping the cost of borrowings for businesses and households steady.

Andrew Bailey, Bank of Ireland governor, said: “In recent weeks we’ve seen further encouraging signs that inflation is coming down. “We’ve held rates again today at 5.25% because we need to be sure that inflation will fall back to our 2% target and stay there. “We’re not yet at the point where we can cut interest rates, but things are moving in the right direction.”

The Office for National Statistics (ONS) announced on Wednesday that Consumer Prices Index (CPI) inflation fell to 3.4% in February, down from 4% in January and the lowest level since September 2021, thanks to the cost of food and eating out rising more slowly.

The data from shows annual food price inflation fell to its lowest level for two years, at 5% in February. However, the 3.4% rate is still above the Bank’s target of 2%.

Nathan Emerson, chief executive of estate agents’ professional body Propertymark, said: “The Bank of England issued an optimistic projection last month that inflation could fall back down to pre Covid-19 levels by this summer.

“There are signs that interest rates are not deterring people from buying their first home. “Propertymark’s own Housing Insight Report found that there has been a 120% increase in the number of potential buyers registered so now that optimism and momentum is gaining in the market, we now need to see interest rates start to fall so that buyers’ affordability can further increase, opening up the market and providing more options for those looking to move home.”

Article sourced from https://www.belfasttelegraph.co.uk/business/northern-ireland/interest-rates-left-unchanged-at-525-as-economy-moving-in-the-right-direction/a405351328.html

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