Central Bank Holds Key Rate as Inflation Cools to Two-Year Low
The central bank kept its benchmark interest rate unchanged on Friday, ending a run of speculation about a summer cut and giving households and lenders a moment to breathe. Headline inflation has now slowed to its lowest level in two years, easing the pressure that had defined policy for much of the previous eighteen months.
In a measured statement, the rate-setting committee said it preferred to wait for "clearer and more durable" evidence that price growth was settling near its target before changing course. Officials pointed to a still-tight labour market and steady consumer demand as reasons not to move too quickly.
Economists were divided on what comes next. Several expect the first cut later in the year if the cooling trend holds, while others warned that energy costs and wage growth could keep the bank on hold well into the autumn. For borrowers, the immediate message was continuity rather than relief.
