Bank of England Keeps the Rate at 5.00%—No Big Surprises
As the MPC had already signalled, the BoE decided to hold Bank Rate steady at 5.00%. After the first cut in August, the committee took a moment to rest before making the next move.
Divides Gently – A Slight Split on the Horizon
- The vote was 8‑to‑1 to keep rates unchanged.
- Only one external member, Dhingra, poked a second cut into the mix—a classic “I’m still feeling the wave” moment.
- Not big drama, but still a hint that opinion still splits.
The BoE’s statement echoed last meeting: keep policy “restrictive enough for a while” to yank stubborn inflation down. The committee made it clear they’re not on a preset “yes‑or‑no” track; decisions will be made one meeting at a time.
Balance Sheet Gets a Little “Shrinking” (But Not a Big Swing)
The MPC will keep cutting the balance sheet by £100 billion over the next year. That means active gilt sales are trimmed to just £13 billion in 2025, with £87 billion of redemptions happening.
- Short‑term tightening effects are balancing against the easing that the Bank Rate setting brings.
No Game‑Changer, Still.
The September decision leaves the BoE’s path unchanged: a patient, measured approach to further “normalisation”. Quarterly 25‑basis‑point cuts stay on the table, with a possible extra cut in November to match the latest forecasts.
Hawkiness vs. Other Central Banks
- Unlike the FOMC’s big 50‑bp cut, the BoE remains more hawkish.
- GBP stays on a defender’s bench, framing 1.30 as a medium‑term floor.
So, expect the bank rate to stay at 5.00% for now—and maybe a single cut later this year. No wild swings, just a steady-building staircase toward stability.
