Bank of England Holds Base Rate at 4.75%

Bank of England Holds Base Rate at 4.75%

The Bank of England (BoE), the central bank of the UK, has held the base rate at 4.75%.

The BoE announced on the 19th (local time) during its monetary policy meeting that the base rate would remain at 4.75%. The decision was made by a majority vote of 6 to 3 among the nine members of the Monetary Policy Committee.

In August, the BoE set the base rate at 5% after lowering it by 0.25 percentage points from 5.25%.

In September, it decided to maintain the 5% rate, considering it premature to lower it again just a month after the previous cut. However, on the 7th of last month, it further reduced the rate by 0.25 percentage points.

The BoE lowered the base rate at that time as UK inflation hit its lowest level in three years.

However, with the inflation rate showing 2.6% annually for two consecutive months, the decision to hold the rate was made. The BoE initially set the inflation target at 2%.

Recently, the UK has seen price increases due to factors like car fuel prices and clothing costs. The core consumer price inflation, excluding food and energy, rose to 3.5% from 3.3% the previous month. The service price inflation remained at 5%, the same as the previous month.

In a press release, the BoE stated, "The remaining domestic inflation pressures are being resolved more slowly," and "We continue to consider various scenarios on how the global shocks that previously raised inflation will be resolved and how long domestic inflation pressures will persist."

Kim Daeyoung, Hankyung.com journalist kdy@hankyung.com