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Interest rates

Bank of England holds interest rate again in another Labour disaster

by DD Staff

December 19, 2024

Andrew Bailey, Bank Of England Governor

key takeaways

The nine-member Monetary Policy Committee of the Bank of England has maintained its main interest rate at 4.75%.

The second rate drop of the year occurred in November when the Bank's Monetary Policy Committee (MPC) lowered the Base Rate from 5% to 4.75%. However, the Bank refrained from making any more cutbacks this week due to the inflation rate rising once more.

Inflation in the UK reached its highest level in eight months in November, according to official data released on Wednesday. Year-over-year, consumer prices rose 2.6%, up from 2.3% the month before. Fuel price increases and significant inflation in services, which account for almost 80% of the GDP, were the main causes of the increase.

Members of the MPC are taking a cautious stance because lower borrowing costs could potentially stoke inflation even further.

It will be a disappointment for many struggling sectors in the economy which would otherwise be helped by cheaper credit in an environment of sluggish growth. Britain's economy has contracted for two months in a row.