LONDON, Sept. 21 (Xinhua) -- The Bank of England (BoE) has voted to maintain its benchmark interest rate at 5.25 percent, the central bank said in a statement on Thursday.
At its meeting ending on Wednesday, the BoE's Monetary Policy Committee voted by a majority of five to four in favor of the decision, the statement noted. Four members preferred to increase the interest rate by 0.25 percentage points to 5.5 percent.
This is the first time the BoE has kept the interest rates unchanged after 14 consecutive rate hikes since December 2021.
Latest data showed the UK's Consumer Prices Index (CPI) rose by 6.7 percent in the 12 months to August. This was the lowest inflation rate since February 2022, falling from the peak of 11.1 percent reached last October.
"CPI inflation is expected to fall significantly further in the near term, reflecting lower annual energy inflation, despite the renewed upward pressure from oil prices, and further declines in food and core goods price inflation," said the BoE.
The BoE forecast the CPI inflation will return to the 2 percent target by the second quarter of 2025.
According to the statement, the bank estimated Britain's economy to have declined by 0.5 percent in July and expected it to rise only slightly in the third quarter this year. "Underlying growth in the second half of 2023 is also likely to be weaker than expected," it said.
Although falling, Britain's 6.7 percent inflation rate is still higher than any other G7 economy and BoE's target of 2 percent.
"Inflation is still not where it needs to be, and there is absolutely no room for complacency," BoE governor Andrew Bailey said.
"We'll be watching closely to see if further increases are needed, and we will need to keep interest rates high enough for long enough to ensure that we get the job done," he stressed.
