Bank of England keep interest rate at 5.25%

Bank of England keep interest rate at 5.25%

20 Jun 2024

Danny Vassiliades, Partner at XPS Pensions Group, commented: “Yesterday’s announcement that CPI inflation fell to 2.0% in the year to May 2024 marked the first time inflation has hit the Bank of England’s 2% target in almost three years.

Despite this, with private sector wage growth remaining high, inflation is expected to rise in the coming months, and with election campaigns firmly underway, the Bank has decided to maintain the base rate at 5.25%.

Given the fall in headline inflation, rate cuts could be on the horizon, with expectations of a cut as early as August. While this will be welcome news for many people’s finances, pension schemes should ensure their funding and investment strategies are prepared for any continuing uncertainty around the timelines of future interest rates.