The Bank of England maintains the interest rate at 4% and adopts a cautious stance towards future rate cuts.

The Bank of England has kept interest rates unchanged at 4% and with concerns over a rebound in inflation intensifying, the prospect of further interest rate cuts later this year is uncertain. The Monetary Policy Committee voted 7-2 in support of maintaining the interest rate unchanged, with long-standing doves Swati Dhingra and Alan Taylor supporting a further 25 basis point cut. Economists had anticipated this decision and the divided vote. The central bank maintained its policy guidance, warning that future rate cuts will be "gradual and cautious," depending on the extent to which the underlying inflationary pressures continue to ease. The statement said, "The risks of medium-term inflationary pressures still dominate the Committee's assessment." Governor Andrew Bailey stated in the statement accompanying the decision, "While we expect inflation to return to the 2% target, we have not yet completely overcome the challenges." The central bank highlighted that progress in easing wage pressures has been more significant than in prices, but recent increases in inflation could put greater pressure on both.