Bank of England leaves cost of borrowing on hold
By Abigail Townsend
Date: Thursday 19 Jun 2025
(Sharecast News) - The Bank of England kept interest rates on hold on Thursday, as widely predicted.
The rate-setting Monetary Policy Committee voted by a majority of six to three to leave the cost of borrowing unchanged at 4.25%.
External members Swati Dhingra and Alan Taylor, and deputy governor Dave Ramsden voted for a 25 basis point cut, to 4%.
Governor Andrew Bailey and chief economist Huw Pill favoured no change.
Central banks are juggling a range of conflicting factors when it comes to unwinding monetary policy.
In the UK, consumer spending is subdued, economic growth is weak and the labour market is continuing to loosen. Global risks are also escalating, including Donald Trump's trade war and geopolitical tensions.
At the same time, however, inflation remains sticky. The consumer price index currently stands at 3.4%, above the BoE's long-term target of 2%.
In the minutes published alongside the decision, the MPC noted that inflation was likely to stay around 3.5% before falling back towards target from next year.
It concluded: "Given the outlook, and continued disinflation, a gradual and careful approach to the further withdrawal of monetary policy restraint remained appropriate."
The decision echoes that of the US Federal Reserve, which also opted to keep rates on hold when it met on Wednesday.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "Policymakers are in a stalemate. Growth has seized up, but inflation has stayed stubbornly sticky.
"Trade deals have cleared some economic clouds, but conflict in the Middle East threatens further turmoil. Energy prices looked like they were on their way down, but are now ramping back up.
"In every direction, there's a conundrum to confront."
Most analysts continue to expect the BoE to trim the cost of borrowing at its next meeting in August.
Matt Swannell, chief economic advisor to the EY Item Club, said: "Even though the MPC stopped short of explicitly promising a reduction in Bank Rate at its next meeting, we continue to expect another 25bps cut in August.
"The committee retained its commitment to 'gradual and careful' interest rate cuts, in a nod to the majority's view that cutting rates too quickly currently appears a bigger risk than lowering them too slowly. But...the minutes suggest that this trade-off is narrowing."
The MPC has cut rates twice so far this year, each time by 25bps.
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN