The Bank of England sees that rate cuts should be considered since the economy is "moving in the right direction."

Governor Andrew Bailey stated that the British economy is "moving in the right direction" for the Bank of England to begin reducing interest rates, but two of his colleagues withdrew their votes in favour of raising rates.

The two BoE officials who had previously advocated for higher rates reversed course and voted 8-1 on Thursday to maintain borrowing prices at their 16-year high of 5.25%.

The majority of analysts surveyed by Reuters had anticipated that one Monetary Policy Committee member would keep voting in favour of raising the bank rate.

However, Jonathan Haskel and Catherine Mann also sided with the majority that wanted no changes made. Once more, Swati Dhingra voted alone to lower the bank rate to 5.0%.

The move by the BoE comes after the U.S. Federal Reserve said on Wednesday that it was still on course to drop interest rates three times this year, which caused stock markets throughout the world to surge.

The European Central Bank has made an effort to calm speculation about a wave of rate cuts for the eurozone, which has gained traction as investors come to believe that the war on global inflation has been won.

Consumer price rise reached its lowest point in over two and a half years, according to data released on Wednesday.

However, the Bank of England stated that important measures of inflation's persistence remained high. Additionally, it stated that despite some additional easing and indications that high borrowing rates were having an adverse effect on the economy, Britain's labour market was still rather tight.

(Sources: investing.com, reuters.com)