Overview

• The Monetary Policy Committee voted 6–3 to keep the bank rate at 4.25% in June’s meeting
• Governor Andrew Bailey warned of a softening labor market after firms shed over 100,000 jobs in May and pay growth moderated
• GDP growth slowed after a 0.7% rise in the first quarter was followed by a 0.3% contraction in April
• Annual inflation fell by 0.1 percentage point from April to May, but officials remain watchful of potential energy price increases from Middle East tensions
• The bank signaled that the first interest rate cut is contingent on sustained disinflation and labor market slack and is likely later this year