UK Monetary Policy Report - November 2025

At its meeting ending on 5 November 2025, the Monetary Policy Committee voted by a majority of 5–4 to maintain Bank Rate at 4%. Four members voted to reduce Bank Rate by 0.25 percentage points, to 3.75%. CPI inflation is judged to have peaked. Progress on underlying disinflation continues, supported by the still restrictive stance of monetary policy. This is reflected in an easing of pay growth and services price inflation. Underlying disinflation is being underpinned by subdued economic growth and building slack in the labour market. Monetary policy is being set to balance the risks around meeting the 2% inflation target sustainably. The risk from greater inflation persistence has become less pronounc *BANK OF ENGLAND HOLDS KEY INTEREST RATE AT 4% IN 5-4 VOTE BOE MPC: MORE EVIDENCE IS NEEDED TO BE SURE THAT CPI IS ON TRACK TO RETURN TO 2%. BOE: PROGRESS ON DISINFLATION INDICATES BANK RATE LIKELY TO CONTINUE GRADUAL DOWNWARD PATH: "GRADUAL AND CAREFUL APPROACH" TO FURTHER WITHDRAWAL OF MONETARY POLICY RESTRAINT... Bank of England keeps key interest rate unchanged at 4% as inflation remains markedly above target The Bank of England has kept its main interest rate unchanged at 4% as inflation in the U.K. remains markedly above target and policymakers await this month’s budget from the U.K. government, which could be one of the most consequential in years. Thursday’s decision by the nine-member rate-setting body was widely anticipated, though some economists thought there was a chance that borrowing rates would be reduced by a further quarter of a percentage point. The vote was tight though, with five voting for unchanged rates and four backing a cut. “We still think rates are on a gradual path downwards, but we need to be sure that inflation is on track to return to our 2% target before we cut them

<GBP=>:*BOE'S BAILEY: INFLATION OF 3.8% IN SEPTEMBER SEEN AS PEAK *BOE'S BAILEY: UNDERLYING PRICES PRESSURES CONTINUED TO EASE *BOE'S BAILEY: NEED TO SEE DOWNWARD PATH BECOMING ESTABLISHED *BOE'S BAILEY: POLICY DEPENDS ON HOW TWO FORCES PLAY OUT *BOE'S BAILEY: ACTIVITY IN… BOE'S BAILEY: CLEAR FROM AGENTS THAT LABOR MARKET SLOWING BOE'S BAILEY SAYS WE HAVE TO REMAIN CAREFUL THAT HIGHER FOOD AND ENERGY PRICES DO NOT LEAD TO 2ND-ROUND EFFECTS ON WAGE- AND PRICE-SETTING BOE'S BAILEY SAYS IT IS ENCOURAGING THAT INFLATION PEAK IN SEPT WAS 0.2 PERCENTAGE POINTS BELOW OUR AUGUST FORECAST BOE'S BAILEY: LATEST INFLATION ENCOURAGING, BUT JUST ONE POINT *BOE'S BAILEY: MOVING TO DEMAND-DRIVEN SYSTEM FOR LIQUIDITY *BOE'S BAILEY: NOT FOR US TO SPECULATE ON BUDGET CONTENTS *BOE'S BAILEY: NOT PASSING JUDGEMENT ON REEVES COMMENTS THIS WK *BOE'S BAILEY: MY OWN VIEW IS THAT WE NEED TO SEE MORE DATA *BOE'S BAILEY: MARKET CURVE AT…