BoE leaves interest rates unchanged, as expected.

The Bank’s second successive ‘hold’ comes as no surprise given the UK’s subdued economic backdrop, although Andrew Bailey downplayed any prospect of near-term rate cuts.

2 November 2023

The Bank of England followed in the footsteps of the Federal Reserve (and indeed the European Central Bank) by holding rates steady at their latest meeting. Voting six in favour of holding while three members wanted to hike by 25bps, this inaction for a second meeting in a row shouldn’t be too much of a surprise to many even if inflation (at 6.7%) remains uncomfortably above the central bank’s 2.0% target.

The UK economy, according to their latest economic update is “subdued”, and they have materially downgraded their outlook and recession risks abound. But, similar to other central banks, it seems their primary focus is on inflation rather than economic support at this time as indeed Governor Bailey commented “it is much too early to be thinking about rate cuts”.