May 9 (Axis Business) — The Bank of England’s Monetary Policy Committee kept the reference interest rate unchanged at 5.25%, while reiterating that monetary policy must still be restrictive to ensure compliance with the 2% inflation target.

The decision was made with a majority of seven votes and was in line with the expectations of analysts surveyed by financial portal Investing.com, who predicted that interest rates would not change. However, there appeared to be a shift towards a looser stance, with two officials voting in favor of a cut of 25 basis points, up from just one basis point at the March meeting.

“Monetary policy must remain restrictive long enough to return inflation to the 2% target sustainably over the medium term, in line with the mandate of the Monetary Policy Committee,” the Bank of England said in a statement. “Since last fall, the Committee has considered that policy should be restrictive for a long period of time until the risk of inflation exceeding the 2% target disappears.”

The UK benchmark interest rate has remained at the current level since September 2023, or for six consecutive meetings. Further announcements will be made in June and August.

Those responsible for monetary policy in the UK gave indications that an interest rate cut could be implemented in one of those months.

A change in interest rates next month “is not something that can be ruled out and is not something that has to be done,” Andrew Bailey, the central bank governor, said at a news conference after the announcement.

Bailey added that although monetary authorities would need to see more evidence that inflation will remain low to lower interest rates, he was optimistic that “things are moving in the right direction.”

The Bank of England’s Policy Committee concluded that it is ready to act as needed and will use the latest data to analyze how long the bank should keep its benchmark interest rate at current levels.