Bank of England holds base rate at 4.75%

The Bank of England’s Monetary Policy Committee (MPC) has voted to maintain the bank’s base interest rate at 4.75%.

The decision follows inflation data published by the Office of National Statistics (ONS) revealing a second consecutive rise in the Consumer Price Index to 2.6% in November 2024, the fastest rate of price rises since March and higher than the Bank of England’s previous expectations.

The bank’s senior economists voted 6-3 in favour of holding interest rates at their current level, with the three MPC members opposing the decision preferring a 0.25 percentage point fall in the Bank of England base rate.

The decision to hold interest rates at their current level follows a statement by the Bank of England governor last month, advising that while rates would come down, it would be a gradual process. The bank’s economists have noted inflationary pressures within the economy, such as high wage growth, continue to persist, while measures announced in October’s Budget are also heightening uncertainty about how they will impact the economy. GDP growth, however, is also proving slower than previous projections, and may put further pressure on economists to reduce the Bank of England base rate that will lower the cost of borrowing and help boost the economy.

The Bank of England’s Monetary Policy Committee will next meet to vote on interest rates in February 2025.