Bank of England leaves cost of borrowing on hold

(Sharecast News) - The Bank of England kept interest rates on hold on Thursday, as widely predicted. The Monetary Policy Committee voted by a majority of six to three to leave the cost of borrowing unchanged at 4.25%.

The decision is in keeping with the BoE's "gradual and careful" approach to cutting rates.

It also echoes that of the US Federal Reserve, which also opted to keep rates on hold when it met on Wednesday.

In the UK, inflation currently stands at 3.4%, above the BoE's long-term target of 2%. There are also a number of international headwinds, including escalating geopolitical tensions and Donald Trump's trade war.

Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: "Economic conditions have played out pretty much as expected since the last meeting in May.

"Wage growth is starting to ease a bit, and there are some headwinds on the horizon.

"Still, domestic demand remains solid, and inflation is still above target, giving policy makers enough reason to stick with a 'wait and see' approach for now."

Most analysts expect the BoE to trim the cost of borrowing at its next meeting in August.