Bank of England Holds Rates at 3.75%; Signals Future Cuts Amid MPC Divisions

• The Bank of England maintained its benchmark interest rate at 3.75% on Thursday, with a narrow 5-4 vote revealing divisions within the Monetary Policy Committee (MPC).
• Governor Andrew Bailey voted to hold rates, while four policymakers advocated for a 25 basis points reduction.
• The central bank expects inflation, currently at 3.4%, to return to its 2% target from April, sooner than previously forecast.
• The MPC seeks clearer evidence of sustainable inflation reduction, not just from temporary factors like lower energy prices.
• Updated projections show the BoE trimming its 2026 growth forecast to 0.9% and raising its peak unemployment estimate to 5.3%.