The Bank of England, by a vote of 8-1, decided to maintain its monetary policy and keep interest rates unchanged at 3.75%, as expected, at its meeting earlier today, Thursday, April 30th. This marks the second consecutive meeting where the rate remains at 3.75%. One member voted for a 25 basis point increase.

The Bank’s interest rate report stated that the conflict in the Middle East is causing uncertainty regarding the outlook for global energy prices. While monetary policy cannot directly influence energy prices, it will be directed towards ensuring that the economy adjusts to achieve the 2% inflation target sustainably.

Inflation, as measured by the Consumer Price Index, has risen to 3.3% and is likely to increase further later this year as the effects of higher energy prices become more apparent. This necessitates monetary policy intervention to curb inflation, particularly as the labor market continues to open up.

In view of all the risks to the economic outlook, the Committee believes it is appropriate to maintain the base interest rate at this meeting. The Committee will continue to monitor the situation in the Middle East and global energy supplies and prices and is prepared to take the necessary actions to ensure that inflation remains on track to achieve the 2% target over the medium term.