The Bank of England has held interest rates at 5.25% again for a fourth consecutive meeting.
i's Money and Business reporter Callum Mason explains when experts think interests rate may finally fall.
He explains that although exact forecasts vary, most economists expect the rate to come down from its 15-year high either in May or in June.
i's Money and Business reporter Callum Mason explains when experts think interests rate may finally fall.
He explains that although exact forecasts vary, most economists expect the rate to come down from its 15-year high either in May or in June.
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NewsTranscript
00:00 We're here in the City of London where the Bank of England has voted for the fourth consecutive
00:04 time to keep interest rates at 5.25%.
00:07 But we're looking at when they might finally drop.
00:12 Over the past two years, interest rates have gone up consecutively.
00:16 They went up between late 2021 and summer 2023 14 times to their high of 5.25%, which
00:23 they're still at now.
00:24 Last year, inflation got to double digit levels, which is why the bank was upping interest
00:28 rates consecutively.
00:30 But now, with inflation at 4%, there have been calls for the bank to drop interest rates.
00:35 Experts are divided on when they think interest rates will go down.
00:38 The majority of forecasters think the first cut to the base rate will come in May or June,
00:43 but some think it could be as late as August.
00:46 So whether interest rates come down sooner or later depends on whether inflation continues
00:50 to fall.
00:51 The bank's currently forecasted that inflation will come down to its 2% target level in the
00:56 second quarter of this year, but it's then said that it might jump back up again and
01:00 remain higher than 2% for months or potentially years to come.
01:04 If inflation continues to fall on its current trajectory, then we could see interest rates
01:08 fall in the summer.
01:10 But nothing is certain, and global events like the crisis in the Red Sea could push
01:14 inflation upwards and mean that rates come down later than expected.
01:17 [MUSIC PLAYING]