London. The Bank of England (BoE) on Thursday cut its official interest rate for the first time since March 2020 and the Covid-19 pandemic, setting it at 5 percent, citing a decline in inflation in recent months.
““Inflationary pressures have eased sufficiently for us to cut rates,” British central bank governor Andrew Bailey was quoted as saying in a report.
Five of the nine members of the Monetary Policy Committee voted in favour of a quarter-point cut, bringing the official interest rate to 5 per cent.
After a series of increases, that rate had remained at 5.25 percent for almost a year, its highest level since the 2008 financial crisis.
The decision was influenced by the sharp fall in inflation, which peaked at around 11% at the end of 2022. Since then, it has been falling until it gradually returned to 2% year-on-year, which was the BoE’s target, and remained at that level in June.
Bailey stressed that price increases had slowed “more quickly than we had anticipated a year ago. But we need to make sure that inflation remains low, and be careful not to cut interest rates too quickly or too much.”
The institution also revised upwards its growth forecast for 2024 to 1.25 percent compared to 0.5 percent projected in its May report.
The US Federal Reserve on Wednesday kept interest rates unchanged at 5.25-5.50 percent for the eighth consecutive time, signaling that it could implement a cut in September. (https://bit.ly/3WrWu3L)The day before, the Bank of Japan carried out its second rate increase, taking it to 0.25 percent.
In Latin America, Brazil opted to leave its rates at 10.5 percent, as did Chile, where they remained at 5.75 percent. Colombia, however, cut them by half a point to 10.75 percent.
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– 2024-08-11 23:17:39
