UK Keeps Interest Rates Unchanged at 16-Year High

At the end of its policy meeting, the Bank of England (BoE) kept its key interest rate unchanged at a 16-year high. However, UK central bank indicated that it is on course to join its European peers in cutting rates over the coming months.

The BoE on Thursday left its key rate at 5.25% for the sixth straight meeting of its policymakers, in line with what investors and economists had been expecting. But in a fresh sign that a move is getting closer, two of the nine members of its Monetary Policy Committee voted to lower the key rate to 5%.

BoE may have to wait for more signs of easing in U.K. inflation and labor-market data before starting interest-rate cuts, Monex Europe analysts say in a note.

“While the BOE is set to receive two more sets of labor market and inflation data between now and the June meeting, in our view the bar is still high for these to build sufficient confidence for the MPC to cut rates,” they say.

If U.K.’s upcoming inflation and labor market data shows deceleration, the BOE could start cutting rates in June but Monex analysts lean in favor of the cuts starting in August. # UK Keeps Interest Rates Unchanged at 16-Year High  Naira Suffers Big, CBN Goes Ballistic Against FX Whales
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