Bank Of England Maintains Interest Rate Amid Unexpected Voting Outcome

According to BlockBeats, on December 19, the Bank of England decided to keep its interest rate steady at 4.75%, aligning with market expectations. The decision, however, came with an unexpected voting result of 6 to 3. Governor Andrew Bailey emphasized that a gradual approach to future rate cuts remains appropriate. He noted the inability to commit to specific timing or magnitude of rate reductions in 2025. The surprising element in the decision was the presence of three members who voted in favor of a 25 basis point rate cut. These members expressed concerns over the risks associated with a significant output gap due to weak demand. They also highlighted that, in the medium term, the Consumer Price Index (CPI) is projected to fall well below the 2% target. Following the announcement, the British pound weakened against the US dollar, with the GBP/USD exchange rate dropping to 1.2604. This reaction reflects market sentiments towards the unexpected dissent within the central bank's decision-making process.