Bank of England keeps bank rate unchanged for 2nd time in a row at 4%

Four members voted to reduce the rate by 0.25 percentage points to 3.75 per cent.

Consumer price index (CPI)-based inflation is judged to have peaked, and progress on underlying disinflation continues, supported by the still restrictive stance of monetary policy, a release from the bank said.

Underlying disinflation is being underpinned by subdued economic growth and building slack in the labour market, it noted.

Monetary policy is being set to balance the risks around meeting the 2-per cent inflation target sustainably.

The risk from greater inflation persistence has become less pronounced recently, and the risk to medium-term inflation from weaker demand more apparent, such that overall the risks are now more balanced, the bank observed, saying more evidence, however, is needed on both.

If progress on disinflation continues, bank rate is likely to continue on a gradual downward path, it said.

ALCHEMPro News Desk (DS)