BANK OF ENGLAND MAINTAINS INTEREST RATE AT 3.75 PCT

LONDON, Feb 6 (Bernama-Xinhua) -- The Bank of England (BoE) has kept its benchmark interest rate unchanged at 3.75 per cent, Britain's central bank said in a statement on Thursday, reported Xinhua.

At its meeting ending on Wednesday, the BoE's Monetary Policy Committee (MPC) voted by a majority of five to four to maintain the rate. Four members voted to reduce the rate by 0.25 percentage points.

In mid-December 2025, the bank announced a 25-basis-point cut to its benchmark interest rate, bringing it down to 3.75 per cent, the lowest level since early 2023.

The move marked the sixth rate reduction since August 2024, when the Bank began easing monetary policy from a 16-year-high rate of 5.25 per cent.

"The Committee judged that the risk from greater inflation persistence had continued to become less pronounced, while some risks to inflation from weaker demand and a loosening labor market remained," the statement said.

Britain's consumer price index (CPI) rose by 3.4 per cent year on year in December 2025, accelerating from 3.2 per cent in November, earlier data from the Office for National Statistics (ONS) showed.

The country's economy expanded marginally in late 2025 amid a subdued underlying momentum, with real gross domestic product (GDP) edging up 0.1 per cent in the September-November period. At the same time, its unemployment rate for people aged 16 and over remained at a high level of 5.1 per cent, according to the ONS.

Bank rate was likely to be reduced further, although there were different views on the timing and extent, said the MPC, noting that "with uncertainty around how precisely a neutral level of bank rate could be estimated, slowing the pace of further easing could provide space to gain assurance about how the risks were evolving."

“Holding the interest rate at 3.75 per cent was expected as the bank grapples with the twin challenges of domestic cost pressures and an unpredictable global outlook," David Bharier, head of research at the British Chambers of Commerce (BCC), commented.

He said BCC's data show that a majority of firms still expect to raise their prices, with labour costs cited as the top cost pressure.

"For businesses across the UK, greater policy certainty and a clear path to lower borrowing costs are essential to unlock investment, boost productivity and transform trade," he added.

--BERNAMA-XINHUA