The Bank of England announced that it has decided to keep the interest rate unchanged at 5.25% for the third consecutive month.
The decision was widely expected by analysts and market participants, who cited the mixed signals from the economy and the uncertainty over the impact of the Omicron variant of Covid-19.
The Bank said that it will continue to monitor the developments closely and act as necessary to achieve the 2% inflation target over the medium term. The Bank also released its latest quarterly inflation report, which showed that inflation is expected to peak at around 5% in the first quarter of 2024, before falling back gradually towards the target.
The report highlighted the risks and challenges facing the economy, such as supply chain disruptions, labour market tightness, and global trade tensions. The Bank said that it will balance these factors against the potential dampening effects of higher interest rates on consumer spending and business investment.