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  1. The Bank of England has kept interest rates at 5.25 per cent, as it forecast that inflation is set to fall to its target level a year-and-a-half earlier than expected, much to the relief of many mortgage owners. The UK central bank began raising interest rates as the pandemic came to an end and energy costs began to rise.
    www.standard.co.uk/news/uk/interest-rates-announcement-bank-england-inflation-b1044513.html
    www.standard.co.uk/news/uk/interest-rates-announcement-bank-england-inflati…
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    The interest the BoE paid on commercial banks’ reserves, which is ultimately covered by the Treasury, has risen sharply in recent years as the central bank lifted its key rate to 5.25 per cent in an effort to bring inflation back under control.
    The revelations will increase scrutiny of the BoE’s decision to pay interest on the entirety of the high street banks’ reserves it holds as part of its quantitative easing programme. When the BoE first rolled out QE it was profitable because of low interest rates but because they have hit 5.25 per cent it is now lossmaking.
    According to the figures, interest income from BoE reserves jumped £1.8bn year-on-year for Lloyds to £2.6bn in 2023, while both Santander’s and NatWest’s payments rose by £1.2bn to £1.9bn and £2.9bn, respectively. Barclays reported that its interest payments rose by £1.1bn, to £1.9bn.
    Andrew Bailey has signalled that the UK is still planning to decrease interest rates despite the inflation situation. Our business reporter James Sillars looks closely at the governor's comments here : The UK's inflation compares to other countries.
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