Bank of England holds interest rates steady

The Bank of England (BoE) has held its main interest rate at 5.25% – a 16-year high. The decision came at its last meeting before the UK’s general election on 4 July.

The Bank’s governor, Andrew Baily, pointed to positive news that inflation had returned to its 2% target, but said it was too soon to cut rates.

“We need to be sure that inflation will stay low and that’s why we’ve decided to hold rates at 5.25% for now,” he said.

As previous energy price-falls drop out of annual inflation data, the BoE expected inflation to return to above target, and repeated a May forecast for inflation to be around 2.5% in the second half of this year.

On the same day, the Swiss Central Bank cut interest rates for a second time this year.