As election looms, BoE set to sit tight on UK rate | The Business Standard
Skip to main content
  • Latest
  • Economy
    • Banking
    • Stocks
    • Industry
    • Analysis
    • Bazaar
    • RMG
    • Corporates
    • Aviation
  • Videos
    • TBS Today
    • TBS Stories
    • TBS World
    • News of the day
    • TBS Programs
    • Podcast
    • Editor's Pick
  • World+Biz
  • Features
    • Panorama
    • The Big Picture
    • Pursuit
    • Habitat
    • Thoughts
    • Splash
    • Mode
    • Tech
    • Explorer
    • Brands
    • In Focus
    • Book Review
    • Earth
    • Food
    • Luxury
    • Wheels
  • More
    • Sports
    • TBS Graduates
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • Gallery
    • Long Read
    • Interviews
    • Offbeat
    • Magazine
    • Climate Change
    • Health
    • Cartoons
  • বাংলা
The Business Standard

Friday
June 13, 2025

Sign In
Subscribe
  • Latest
  • Economy
    • Banking
    • Stocks
    • Industry
    • Analysis
    • Bazaar
    • RMG
    • Corporates
    • Aviation
  • Videos
    • TBS Today
    • TBS Stories
    • TBS World
    • News of the day
    • TBS Programs
    • Podcast
    • Editor's Pick
  • World+Biz
  • Features
    • Panorama
    • The Big Picture
    • Pursuit
    • Habitat
    • Thoughts
    • Splash
    • Mode
    • Tech
    • Explorer
    • Brands
    • In Focus
    • Book Review
    • Earth
    • Food
    • Luxury
    • Wheels
  • More
    • Sports
    • TBS Graduates
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • Gallery
    • Long Read
    • Interviews
    • Offbeat
    • Magazine
    • Climate Change
    • Health
    • Cartoons
  • বাংলা
FRIDAY, JUNE 13, 2025
As election looms, BoE set to sit tight on UK rate

Global Economy

BSS/AFP
20 June, 2024, 11:00 am
Last modified: 20 June, 2024, 12:28 pm

Related News

  • Govt to set up Debt Office as loan burden to hit Tk29 lakh cr by FY28
  • Economy to remain in operation during Eid vacation: Adviser Salehuddin
  • A budget that shrinks to fit
  • Can ‘optimistic’ growth, inflation targets be met?
  • Commitment to rebuild new Bangladesh not reflected: Jamaat reacts to budget

As election looms, BoE set to sit tight on UK rate

The BoE was widely forecast to keep its cost of borrowing at 5.25 percent, a 16-year high, following a regular monetary policy meeting

BSS/AFP
20 June, 2024, 11:00 am
Last modified: 20 June, 2024, 12:28 pm
FILE PHOTO: The Bank of England logo is seen on a lectern during the launch event for the new note design at the Turner Contemporary gallery in Margate, Britain, October 10, 2019. Leon Neal/Pool via REUTERS/File Photo
FILE PHOTO: The Bank of England logo is seen on a lectern during the launch event for the new note design at the Turner Contemporary gallery in Margate, Britain, October 10, 2019. Leon Neal/Pool via REUTERS/File Photo

The Bank of England was set to hold its interest rate steady on Thursday despite slowing UK inflation, with higher price risks and Britain's looming election preventing a cut, according to analysts.

The BoE was widely forecast to keep its cost of borrowing at 5.25 percent, a 16-year high, following a regular monetary policy meeting.

This despite the UK annual inflation rate slowing in May to a near three-year low of 2.0 percent, matching the central bank's target.

The Business Standard Google News Keep updated, follow The Business Standard's Google news channel

"Despite inflation falling back to target, the BoE isn't expected to cut rates" Thursday, noted ARJ Capital analyst Manoj Ladwa.

"Given the upcoming UK general election on July 4th, traders are instead expecting the bank to cut rates in August."

'Political bias'

Julian Jessop, from the Institute of Economic Affairs think tank, said the BoE would likely sit tight as UK services inflation remains well above two percent, while energy bills are set to rise towards the end of the year.

Nevertheless, the central bank "should not hesitate to cut interest rates, even during an election campaign.

"Importantly, the Bank should avoid the perception of political bias in either direction and make their decision on the basis of the better news on the inflation data," Jessop added.

Analysts argued that the inflation drop, while handing a boost to embattled Prime Minister Rishi Sunak, was unlikely to prevent his Conservatives from losing the election to the main opposition Labour party.

Keir Starmer's Labour has consistently led the Conservatives by around 20 points in opinion polls for nearly two years.

Elevated interest rates have meanwhile worsened a UK cost-of-living squeeze because they increase borrowing repayments, thereby cutting disposable incomes and crimping economic activity.

The BoE began a series of rate hikes in late 2021 to combat inflation, which rose after countries emerged from Covid lockdowns and accelerated after the invasion of Ukraine by key oil and gas producer Russia.

After peaking at 11.1 percent in October 2022, consumer price growth has cooled following a series of interest-rate hikes by the UK central bank.

Britain's economy, however, stagnated in April after emerging from recession in the first quarter of the year, as businesses and households weathered the cost-of-living crunch.

Should the BoE maintain its rate Thursday, it would mirror policy by the US Federal Reserve, which says it is not yet ready to cut, but it would contrast with the European Central Bank and other central banks that have started to reduce borrowing costs.

Central banks in Norway and Switzerland were also due to announce rate decisions Thursday. While the former was expected to keep its 4.5 percent level, the Swiss outcome was less clear after an uptick in local inflation that could prevent a further cut, according to analysts.

The Swiss National Bank in March became the first major central bank to reduce interest rates after a sustained period of hikes to combat soaring inflation.

World+Biz / Europe

BoE / Economy / England

Comments

While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.

Top Stories

  • Infographics: TBS
    Lengthy legal road ahead to repatriate Saifuzzaman's wealth from UK
  • From fact-checker to fact-checked: CA Press Wing’s turn in the hot seat
    From fact-checker to fact-checked: CA Press Wing’s turn in the hot seat
  • Wreckage of a Boeing 787 Dreamliner showing part of its registration "VT-ANB" in Ahmedabad, India, June 12, 2025. REUTERS/Amit Dave
    Air India Dreamliner crashes into Ahmedabad college hostel, kills over 290

MOST VIEWED

  • Keir Starmer declines to meet CA Yunus: FT report
    Keir Starmer declines to meet CA Yunus: FT report
  • Wreckage of a Boeing 787 Dreamliner showing part of its registration "VT-ANB" in Ahmedabad, India, June 12, 2025. REUTERS/Amit Dave
    Air India Dreamliner crashes into Ahmedabad college hostel, kills over 290
  • Saifuzzaman Chowdhury. Photo: Collected
    UK crime agency now freezes assets of ex-land minister Saifuzzaman: AJ
  • File Photo of Chief Adviser Muhammad Yunus: UNB
    Prof Yunus to receive Harmony Award from King Charles today
  • Infofgraphics: TBS
    DGHS issues 11-point directive to prevent spread of Covid-19 in Bangladesh
  • Bangladesh Bank Governor Ahsan H Mansur. TBS Sketch
    Bangladesh mulls settlements with tycoons over offshore wealth: BB governor tells FT

Related News

  • Govt to set up Debt Office as loan burden to hit Tk29 lakh cr by FY28
  • Economy to remain in operation during Eid vacation: Adviser Salehuddin
  • A budget that shrinks to fit
  • Can ‘optimistic’ growth, inflation targets be met?
  • Commitment to rebuild new Bangladesh not reflected: Jamaat reacts to budget

Features

Among pet birds in the country, lovebirds are the most common, and they are also the most numerous in the haat. Photo: Junayet Rashel

Where feathers meet fortune: How a small pigeon stall became Dhaka’s premiere bird market

1d | Panorama
Illustration: Duniya Jahan/ TBS

Forget Katy Perry, here’s Bangladesh’s Ruthba Yasmin shooting for the moon

2d | Features
File photo of Eid holidaymakers returning to the capital from their country homes/Rajib Dhar

Dhaka: The city we never want to return to, but always do

3d | Features
Photo collage shows political posters in Bagerhat. Photos: Jannatul Naym Pieal

From Sheikh Dynasty to sibling rivalry: Bagerhat signals a turning tide in local politics

5d | Bangladesh

More Videos from TBS

Banks' estimates were wrong: Bangladesh Bank spokesperson

Banks' estimates were wrong: Bangladesh Bank spokesperson

5h | Podcast
What exactly happened to the ill-fated Boeing aircraft?

What exactly happened to the ill-fated Boeing aircraft?

6h | TBS World
Govt to set up Debt Office as loan burden to hit Tk29 lakh cr by FY28

Govt to set up Debt Office as loan burden to hit Tk29 lakh cr by FY28

6h | TBS Insight
Curfew imposed for second night in Los Angeles

Curfew imposed for second night in Los Angeles

7h | TBS World
EMAIL US
contact@tbsnews.net
FOLLOW US
WHATSAPP
+880 1847416158
The Business Standard
  • About Us
  • Contact us
  • Sitemap
  • Advertisement
  • Privacy Policy
  • Comment Policy
Copyright © 2025
The Business Standard All rights reserved
Technical Partner: RSI Lab

Contact Us

The Business Standard

Main Office -4/A, Eskaton Garden, Dhaka- 1000

Phone: +8801847 416158 - 59

Send Opinion articles to - oped.tbs@gmail.com

For advertisement- sales@tbsnews.net