Bank of England holds rates in knife-edge vote that hints at December cut

Core Viewpoint - The Bank of England (BoE) has decided to maintain the benchmark Bank Rate at 4.0%, with a narrow 5-4 vote, indicating potential for a rate cut following the upcoming government budget [1][2][3] Monetary Policy Committee (MPC) Insights - The MPC's decision reflects concerns over weaker economic demand, while the risk of persistent high inflation has decreased [2] - Governor Andrew Bailey noted that inflation risks have shifted downwards, but emphasized the need for further evidence before making any changes [3][5] - Deputy Governors Sarah Breeden and Dave Ramsden were among the minority advocating for a rate cut [3] Inflation and Economic Outlook - Current inflation in the UK stands at 3.8%, the highest among the G7 economies, with the BoE's rate being double that of the European Central Bank [4] - The MPC believes inflation has peaked and is expected to decline in the coming months due to weakening economic growth and job market conditions [5] - The BoE forecasts that inflation will remain above the 2% target until Q2 2027, although it anticipates a slight decrease to 1.9% at that time [6]