Published by Global Banking & Finance Review®
Posted on February 5, 2026
2 min readLast updated: February 5, 2026
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The Bank of England held interest rates at 3.75% after a close 5-4 vote. Governor Bailey indicated possible future rate cuts, with inflation risks lessening.
LONDON, Feb 5 (Reuters) - The Bank of England left interest rates on hold at 3.75% in a surprisingly close 5-4 split vote, with Governor Andrew Bailey and external policymaker Catherine Mann saying they could join those pushing to cut borrowing costs at some point.
Below are key comments from the press conference on Thursday.
GOVERNOR ANDREW BAILEY:
"Our first key policy judgment (is), that the risk from greater inflation persistence has continued to become less pronounced."
"While wage growth may only be falling slowly, new bank staff analysis provides reassurance that structural changes in wage setting will not keep adding to inflationary pressures."
"Based on the current evidence, bank rate is likely to be reduced further, but judgments around further policy easing will become a closer call."
"On the one hand, cutting of the bank rate too quickly or by too much could lead to inflation pressures persisting, requiring policy to change course. On the other hand, waiting too long to ease policy could come at the cost of a sharper downturn in activity and subsequently inflation, requiring greater policy easing."
"If the economy and the outlook for inflation evolve as we expect, there should be some scope for further easing in monetary policy in the period ahead, but for every cut in bank rate, how much further to go becomes a closer call."
"We need to see more evidence, in my view, that we're going to get this sustainable return to target. And that really is an issue about what I call underlying inflation."
(Reporting by UK bureau)
The Bank of England is the central bank of the United Kingdom, responsible for setting monetary policy, issuing currency, and maintaining financial stability.
Interest rates are the cost of borrowing money or the return on savings, expressed as a percentage of the amount borrowed or saved.
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power.
Monetary policy refers to the actions taken by a central bank to control the money supply and interest rates to achieve macroeconomic objectives.
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