UK interest rates have been kept unchanged at 5.25% by the Bank of England, marking the fifth consecutive decision to maintain rates.
The Bank of England's Monetary Policy Committee (MPC) voted eight to one in favour of maintaining rates, with one member preferring to reduce rates to 5%. This compared to a six-three split last month, when three members voted to hike.
Sterling fell 0.5% against the dollar and the FTSE 100 soared to a 1.8% gain following the decision.
BoE governor Andrew Bailey said: "In recent weeks we’ve seen further encouraging signs that inflation is coming down.
"We’ve held rates again today at 5.25% because we need to be sure that inflation will fall back to our 2pc target and stay there.
"We’re not yet at the point where we can cut interest rates, but things are moving in the right direction."
BOE: rates left unchanged. No members voted for a hike, this is the dovish pivot the market has been waiting for. No one voting for a hike opens the door to rate cuts in June.
— kathleen brooks (@KATHLEENBROOKS) March 21, 2024
Dovish pause from the #BoE: moving in right direction to cut rates, not there yet.
— Chris Beauchamp (@ChrisB_IG) March 21, 2024
Targets for inflation to reduce to 2% have been maintained and the MPC appears confident it can achieve this, although it warned inflation may depart from said target "as a result of shocks and disturbances".
"Monetary policy will need to remain restrictive for sufficiently long to return inflation to the 2% target sustainably in the medium term in line with the MPC’s remit," the Bank of England said in its statement.
"The Committee will keep under review for how long Bank Rate should be maintained at its current level."