The Bank of England has kept interest rates at 3.75%, though the post-decision press conference was marked by Governor Andrew Bailey’s emotional tribute to the late chancellor Alistair Darling. Bailey became visibly moved when discussing Darling’s integrity during the financial crisis.
The monetary policy committee voted 5-4 to hold rates steady, with four members supporting an immediate cut. This narrow decision follows six previous rate reductions since mid-2024 and suggests further easing is likely. On monetary policy matters, Bailey projected inflation would fall to around 2% by spring and endorsed the market’s 50-50 assessment of a March rate cut.
The press conference took an unexpected emotional turn when Bailey addressed recent revelations about Peter Mandelson leaking sensitive government policy details to Jeffrey Epstein during the 2008-09 financial crisis. Bailey said he was “shocked” by these revelations and spoke with evident emotion about working with Alistair Darling during that period.
Bailey praised Darling’s approach to the crisis, saying “Alistair Darling was doing all the right things, and he was doing them with a thorough sense of honesty and decency.” His voice trailed off as he noted that Darling, who died in 2023, cannot speak for himself today. The governor’s emotional response highlighted the contrast between Darling’s integrity and the ethical lapses revealed in the Mandelson case.
On economic matters, the Bank forecasts GDP growth of just 0.9% this year, down from 1.2% previously, while unemployment is expected to reach 5.3%. Chancellor Rachel Reeves’s budget measures, including utility bill cuts and rail fare freezes from April, are projected to drive inflation down to 2.1% by mid-2026, compared to 3.4% in December, marking significant progress toward the 2% target.
Bank of England Maintains 3.75% Rate as Governor Bailey Praises Late Alistair Darling
