Bank of England keep rates at 15-year high, rules out quick cuts to help economy

investing.com:

By William Schomberg and Andy Bruce

LONDON, Nov 2 (Reuters) — The Bank of England held interest rates at a 15-year peak as it kept up its fight against the highest inflation among the world's big rich economies, and it stressed that it did not expect to cut them any time soon.

Despite publishing forecasts which now show the British economy now skirting close to a recession and flat-lining in the coming years, the BoE held Bank Rate at 5.25% for the second meeting in a row after 14 back-to-back increases.

It also reinforced its message that borrowing costs were set to stay high, even though only about half of the impact of its long run of rate hikes have been felt in the economy so far.

The Monetary Policy Committee (MPC) voted 6-3 to keep Bank Rate on hold, in line with economists' expectations in a Reuters poll.

«The MPC's latest projections indicate that monetary policy is likely to need to be restrictive for an extended period of time,» the BoE said. «Further tightening in monetary policy would be required if there were evidence of more persistent inflationary pressure.»

In September, the BoE had said rates would need to remain «sufficiently restrictive for sufficiently long.»

Governor Andrew Bailey also tried to hammer home the message that inflation's fall over the past year from its highest since the 1980s and the weaker economic outlook should not be seen as a sign that rate cuts might soon be on the table, and a more likely possibility was another rate hike.

«We need to see inflation continuing to fall all the way to our 2% target,» Bailey said in a statement.

«We've held rates unchanged this month, but we'll be watching closely to see if further rate increases are needed. It's much too early to be thinking