O Banco da England cut the interest rate this Thursday (7), but four of its nine members – concerned with the inflation High – tried to leave the costs of loans Unchanged.
The difficulty in reaching an agreement made the monetary policy committee had to make two votes on fees For the first time in its history.
With the committee divided on how to react to an inflation rate that, according to the forecasts of the banco centralIt will soon be twice about its 2% target and a recent job worsens, President Andrew Bailey and four pairs advocated the reduction of interest rate from 4.25% to 4%.
But this only happened after the first round of voting ended in a 4-4-1 division, with Alan Taylor initially defending a 0.5 percentage point cut.
Among the four members who supported the interest maintenance was Clare Lombardelli, vice president of monetary policy, who for the first time broke with the majority. Chief economist Huw Pill also voted to maintain interest at 4.25%.
The Bank of England has repeated its guidance on “a gradual and careful approach” for new cuts in loan costs, but added a new line to its message about perspectives, implying that its series of cuts may be coming to an end.
“The restriction of monetary policy has decreased by reducing the basic interest rate,” he said, no longer directly saying that the policy is still restrictive. He repeated that there is no previously determined trajectory for loan costs.
The interruption of the interest cut process would be a blow to Finance Minister Rachel Reeves and for Prime Minister Keir Stmermer, who has had difficulty fulfilling their promise to voters to accelerate the slow economic growth of the United Kingdom.
Bailey said the decision to cut interest for the fifth time since August last year was “finely balanced,” although he believes they are still in a downward trajectory.
“But any future cut in interest will need to be done gradually and carefully,” Bailey said in the statement.
