Inflation may drop to 2% in months – as Bank of England holds interest rate for fourth time in a row
The governor of the Bank of England has told Sky News he expects the next interest rate move to be a cut.
Andrew Bailey was speaking shortly after the Bank forecast that inflation could ease to its 2% target within a few months.
However, it opted to hold borrowing costs at 5.25% for the fourth time in a row at its latest meeting.
One member of the Bank‘s rate-setting Monetary Policy Committee (MPC) voted for a cut in its base-level interest rate for the first time since the pandemic.
Britain’s central bank signalled that it was now edging closer to reducing the rate, as it dropped language about the potential need for further hikes from the minutes of its meeting and did not push back against widespread expectations that it will begin cutting later this year.
Interest rate decision – live updates
That was despite continued caution over the outlook for the pace of price increases.
In response to the question how long interest rates should be at this level, Mr Bailey responded: “The decision, unless the world changes, and of course unfortunately the world does change and particularly at the moment, the next decision is more likely to be when do we cut.”
He added: “We haven’t reached a view on when that will be.”
In a further sign that it is beginning to consider lowering the rate, the nine-member committee was split three ways, with one member, Swati Dhingra, voting for a cut, two members voting for higher rates and the remaining six members favouring a hold.
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Sky News speaks to BoE governor
It is the first time since March 2020 that a member has voted for lower rates, and the first time since March 2008 that the committee was split three ways over whether to raise, lower or hold.
Investors currently anticipate that the Bank will begin cutting rates in the middle of the year, reducing them to just over 3% by 2026.
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The Bank’s forecasts did little to dissuade them that these cuts are coming, though Mr Bailey said the moment had not yet come.
He pointed to the fact that while the consumer price index measure of annual inflation is set to drop to 2% in April, it will later bounce back, mostly due to energy costs.
He said: “Today we’ve decided to hold interest rates at 5.25%. We have had good news on inflation over the past few months. It has fallen a long way, from 10% a year ago to 4%.
“But we need to see more evidence that inflation is set to fall all the way to the 2% target, and stay there, before we can lower interest rates.”
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The Bank upgraded its forecasts for gross domestic product (GDP) growth in the coming years, projecting annual growth rates of 0.5% by early next year (compared with a previous forecast of zero growth), 0.8% by early 2026 (compared with 0.6%) and 1.5% by early 2027.
However, it said that it expected only zero GDP growth in the final quarter of last year – implying (since the previous quarter was a contraction) that there is a near 50:50 chance of the UK facing a technical recession.
The Bank’s economists reckon that around two-thirds of the impact of higher interest rates has now fed through to the wider economy, but more than two million households are still due to see their mortgages refix to higher rates in the coming months.
Liverpool have won the Premier League title after a 5-1 victory over Tottenham at Anfield.
Arne Slot’s men did it in impressive style, turning over Spurs in a convincing win.
It was a rocky start for the Reds after Dominic Solanke put the north London side ahead.
However, fortunes quickly changed in the first half as Liverpool scored three times without a response.
Captain Virgil van Dijk (centre) celebrates. Pic: Reuters
Salah on his knees in celebration after the final whistle. Pic: AP
Liverpool’s Harvey Elliott (below) and Jarell Quansah celebrate after full-time. Pic: PA
Slot cheers after the full-time whistle. Pic: AP
In the second half, it took until the 63rd minute for Mohamed Salah to make it 4-1 before a fifth followed.
The Reds have won the title in manager Arne Slot’s first season in charge, and move level with fierce rivals Manchester United on 20 league championships.
But it makes them arguably the most successful English club ever as they have won more European Cup or Champions League titles.
Liverpool captain Virgil van Dijk told Sky Sports after the final whistle: “It’s special and it’s something that we don’t take for granted. It’s amazing.
“A lot of emotions before the game, during the whole week, but we got the job done and we (are) truly deserved champions of England. (Liverpool is) the most beautiful club in the world and I think we deserve all of this. Let’s enjoy the next couple of weeks and let it sink in.”
Liverpool’s Kostas Tsimikas poses with a Premier League trophy cut out. Pic: Reuters
Manager Arne Slot and his team after the final whistle. Pic: AP
Slot took over last summer from Jurgen Klopp, who guided them to their previous and maiden Premier League title triumph in 2020, when the COVID-19 lockdown saw matches played behind closed doors.
He is the first Dutch manager to win the Premier League and the fifth man to do so in a debut campaign after Jose Mourinho, Carlo Ancelotti, Manuel Pellegrini, and Antonio Conte.
Speaking to Sky Sports he said: “They [the players] did an outstanding job today. The main job was to win. Everyone said we had got it already. But we had to make sure and we got over the line.”
Several players, including Alisson Becker, Trent Alexander-Arnold, Virgil van Dijk, and Mohamed Salah, played leading roles in both the 2025 and 2020 campaigns.
Van Dijk and Salah recently signed new contracts extending their careers at the club.
Mohamed Salah takes a selfie with fans after scouring the fourth Liverpool goal. Pic: AP
Fans at Anfield during the game. Pic: AP
Fans in the stands at Anfield before full-time. Pic: Reuters
Liverpool will have to wait until the final game of the season – at home to Crystal Palace on 25 May – to be presented with the Premier League trophy.
It will be the first time the club’s fans will have seen their side lift the top-flight title in person since 1990.
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Two pro-Palestinian demonstrators have thrown red powder on Tower Bridge – just moments before leading runners in the London Marathon went past.
The protesters were arrested on suspicion of causing a public nuisance and remain in custody, said the Metropolitan Police.
A video shared by Youth Demand, which is calling for a trade embargo on Israel, shows two people jumping over a barrier that separates spectators from the race course.
The pair, wearing t-shirts that say “Youth Demand: Stop Arming Israel”, are then seen standing in the middle of the road on the bridge.
Pic: LNP
They throw red powder in the air as an official marathon car goes past displaying the race time.
A motorbike with a cameraman on board continues along the route, while a second motorbike stops and one of the riders gets off and pushes the pair out of the way, just before the men’s elite runners pass.
Several police officers then jump over the barrier and detain the pair, the footage shows.
There appeared to be no impact on the marathon.
More than 56,000 participants were expected to take part in the 26.2-mile race through the capital.
Sabastian Sawe of Kenya won the men’s elite race in a time of two hours, two minutes and 27 seconds, while Ethiopia’s Tigst Assefa shattered the women’s-only world record in two hours, 15 minutes and 50 seconds.
Assefa beat the previous best of two hours, 16 minutes and 16 seconds set last year in London by Kenyan Peres Jepchirchir.
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Pic: LNP
The Metropolitan Police said in a statement: “At around 10.38am, two protesters from Youth Demand jumped over barriers at Tower Bridge and threw red paint on to the road.
“Marathon event staff intervened to remove the protesters from the path of the men’s elite race which was able to pass unobstructed.”
The force added that they were “quickly supported by police officers who arrested the protesters on suspicion of causing a public nuisance”.
The Met said the paint “appeared to be chalk-based” and was not expected to “present a hazard to runners yet to pass this point”.
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