UK central bank splits narrowly as inflation slows

Описание: The Bank of England announced it is keeping its main interest rate at 4 % after a close-run vote of 5-4 by its Monetary Policy Committee.
The central bank cited recent data indicating inflation has peaked at around 3.8 % and is expected to decline further early next year, but also noted economic activity is weak.

Governor Andrew Bailey cast the deciding vote and emphasised that while the inflation outlook is improving, there is not yet enough evidence to justify a rate cut. Some committee members feared cutting too soon could risk a rebound in inflation. Others argued that the high rates were suppressing growth and employment.
Furthermore, the Bank released individual voting records for the first time, increasing transparency but also highlighting divisions within the committee.

Markets reacted cautiously. The FTSE 100 fell slightly, the pound firmed, and gilt yields dropped as investors weighed the possibility of rate cuts in December versus a longer-pause view.
Economists noted that while inflation is heading in the right direction, the labour market is showing signs of cooling job vacancies are falling and construction activity is weak which may give the Bank more reason to ease next year, but timing remains uncertain.

Going forward, attention will centre on the Bank's next inflation report and whether upcoming data on wages and employment confirm the easing trend. The decision sends a signal that although inflation pressures are easing, the door to policy support remains open but only if there is clear evidence.

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