Bank of England (BoE): to keep rates at 5.25%

The Bank of England (BoE) has a crucial role in shaping the UK economy, particularly through its Monetary Policy Committee (MPC) actions. The MPC sets the UK’s base interest rate and other key monetary policies to meet the government’s inflation targets.

Bank of England Monetary Policy Committee meeting dates

• 1 February (with Monetary Policy Report)
• 21 March (with Monetary Policy Report)
• 9 May (with Monetary Policy Report)
• 20 June (with Monetary Policy Report)
• 1 August (with Monetary Policy Report)
• 19 September (with Monetary Policy Report)
• 7 November (with Monetary Policy Report)
• 19 December (with Monetary Policy Report)

Last BoE MPC Meeting’s Decision

At the last MPC meeting, which concluded on 20 June 2024, the committee decided to keep the base interest rate at 5.25%. This decision was made as part of the BoE’s efforts to combat inflation, which has been a significant concern over the past months even though it is slower than before.

Forecast Bank of England base rate

All eyes are on the upcoming MPC meeting on 1 August 2024, where there is speculation about a potential interest rate cut. The UK inflation rate has shown signs of slowing, and the Consumer Prices Index (CPI) currently sits at 3.2%, slightly higher than expected. This follows recent higher-than-expected UK wage growth and stronger-than-anticipated GDP figures, suggesting the UK economy is holding up better than many expected.

Markets anticipate potential rate cuts later in the year, with many economists predicting August as a more likely date.

What is the MPC of the Bank of England?

The Monetary Policy Committee (MPC) of the Bank of England meets regularly to decide on the UK’s base interest rate and other monetary policies. The MPC’s main goal is to achieve the government’s inflation target, which is currently set at 2%. The committee meets eight times a year, and its decisions have wide-ranging implications for the UK economy.

Composition of the MPC

The MPC is composed of nine members:

• The Governor of the Bank of England
• Three Deputy Governors (for Monetary Policy, Financial Stability, and Markets & Banking)
• The Bank’s Chief Economist
• Four external members appointed by the Chancellor of the Exchequer

Each member has one vote, and the Governor votes last, which can be decisive in the case of a tie.

What Happens at the MPC Meetings?

MPC meetings span three days and involve comprehensive discussions on the latest economic data. On the first two days, members review reports from Bank staff and debate the appropriate monetary policy response. On the third day, they vote on the interest rate and other measures, with the decision announced the following Thursday at 12 pm (UK time). Every other meeting is accompanied by an inflation report.

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