Ankara: The Bank of England on Thursday kept its benchmark interest rate unchanged at 4%, in line with the market forecasts. This decision marks the second consecutive instance of maintaining the rate after the bank concluded a series of five rate cuts in September.

According to Anadolu Agency, the decision by the bank's Monetary Policy Committee was made by a narrow 5-4 vote. Five members voted to keep the bank rate unchanged, while four members advocated for a 25 basis point reduction. The bank's statement noted that the Consumer Price Index (CPI) inflation is believed to have peaked, with ongoing progress in underlying disinflation supported by the still restrictive stance of monetary policy. This is reflected in the easing of pay growth and services price inflation, with underlying disinflation being underpinned by subdued economic growth and increased slack in the labor market.

The central bank emphasized that its monetary policy aims to balance the risks around sustainably meeting the 2% inflation target. While the risk of inflation remaining high has recently decreased, the risk of weaker demand lowering inflation has grown, making the overall outlook more balanced. However, the bank stressed that more evidence is needed on both fronts, and the extent of future rate cuts will depend on the evolution of the inflation outlook. If disinflation progresses, the Bank Rate is likely to continue on a gradual downward path.

In September, annual consumer inflation in the UK was recorded at 3.8%, stable compared to the previous month, yet remaining at its highest level since January 2024.