Bank of England holds interest rates at 5.25%

The governor of the Bank of England says it needs to “see more evidence” that price rises have slowed further before cutting interest rates.

Andrew Bailey said he was “optimistic that things are moving in the right direction” as rates were held at a 16-year high of 5.25% for the sixth time in a row.

Bailey says the Bank expects inflation, which measures the rate prices rise at, will fall “close” to its 2% target in the next couple of months.

It paves the way for a first interest cut to be made in the summer, possibly as early as June if inflation falls as predicted.

Bailey said there had been “encouraging news” on inflation, which official figures last month showed had fallen further to 3.2%.

“We need to see more evidence that inflation will stay low before we can cut interest rates,” he said.


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