London The Bank of England (BoE) kept its main interest rate at 5.25 percent this Thursday despite UK inflation falling to 2 percent, the institution’s target, and in the context of the UK legislative elections in July.
“It is good news that inflation is back to our 2% target,” Bank of England Governor Andrew Bailey said in a statement, adding that the monetary institution must nevertheless “ensure that inflation remains stable” before acting on interest rates.
The Bank of England stressed that “the date of the election (July 4) was not taken into account in this decision” to keep interest rates unchanged.
This is the seventh time the Bank of England has kept interest rates at that level, something that could change in the context of inflation, which fell to 2 percent year-on-year in the United Kingdom in May, for the first time in three years, according to figures released by officials on Wednesday.
For its part, the Swiss National Bank cut its official interest rate by 25 percentage points to 1.25 percent, its second cut this year.
The decision was imminent, given the recent recovery in economic growth and the gently breaking trend of low inflation in Switzerland.
“Underlying inflationary pressure eased again compared to the previous quarter,” the Swiss National Bank said. “With today’s cut in the SNB’s official interest rate, the SNB can maintain accommodative monetary conditions.”
Before the decision, markets were pricing in a 68% chance of a rate cut and a 32% chance of a rate cut.
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