The Bank of England kept its key interest rate on hold at 4.25% during its Thursday meeting, with economists expecting the central bank to wait until August before it cuts again.
Six out of nine of the BOE’s monetary policy committee opted to hold rates with three opting for a 25-basis-points cut.
“Underlying UK GDP [gross domestic product] growth appears to have remained weak, and the labour market has continued to loosen, leading to clearer signs that a margin of slack has opened up over time,” the central bank said in a statement.
“Measures of pay growth have continued to moderate and, as in May, the Committee expects a significant slowing over the rest of the year,” it said, adding that the MPC “remains vigilant about the extent to which easing pay pressures will feed through to consumer price inflation.”
The policymakers’ decision to hold rates comes after the latest data out Wednesday showed the U.K.’s annual inflation rate reached 3.4% in May, meeting analyst expectations but lingering far above the bank’s target of 2%.
