UK inflation is heading in 'right direction,' but Bank of England isn't ready to cut rates

abcnews.go.com:

The Bank of England has kept its main interest rate unchanged at a 16-year high even though inflation continues to drop from multi-decade peaks

LONDON — The Bank of England kept its main interest rate unchanged at a 16-year high on Thursday and avoided signaling, unlike other central banks, when it might start to cut even though inflation has dropped sharply from multidecade peaks.

The decision to leave the key rate at 5.25% was widely anticipated in financial markets and comes a day after the U.S. Federal Reserve also kept its benchmark rate steady. But unlike the Fed, the Bank of England gave few explicit indications that it was getting ready for a series of interest rate reductions soon.

The Swiss National Bank went the other way by becoming the world's first major central bank to cut rates in the current cycle, with its surprise quarter-point reduction Thursday.

In the U.K., market expectations that lower interest rates were on the horizon got a boost this week with news that inflation fell to a 2.5-year low of 3.4% in February — more than anticipated — and is now not far off the Bank of England’s target rate of 2%.

Bank Gov. Andrew Bailey said there have been “further encouraging signs” that inflation is coming down but that more evidence was needed “to be sure” that inflation will fall to his goal and stay there.

“We’re not yet at the point where we can cut interest rates, but things are moving in the right direction,” he said.

The bank's rate-setting Monetary Policy Committee acknowledged that inflation has been trending lower and could fall below the 2% target in the second quarter of the year.

One rate-setter voted for a quarter-point reduction, while the others backed no change, including two who had voted for