LONDON (AP) — The Bank of England maintained its key U.K. interest rate at a 16-year high of 5.25% though it gave a broad hint that a reduction could be on the cards as soon as June as inflation is forecast to fall below target.
In a statement Thursday, the bank’s nine-member Monetary Policy Committee voted 7-2 to keep rates unchanged, with the 2 dissenters backing a quarter-point reduction. Last time, only one member voted for a quarter-point cut.
Like the U.S. Federal Reserve last week, which also kept rates, on hold the majority on the panel wanted to see more evidence that inflation is under control.
The increase in the number of those backing a U.K. rate reduction is a clear indication that there is a shifting balance on the committee in favor of cuts.
“We’ve had encouraging news on inflation and we think it will fall close to our 2% target in the next couple of months," said Bank Gov. Andrew Bailey. "We need to see more evidence that inflation will stay low before we can cut interest rates. I’m optimistic that things are moving in the right direction.”
Bailey indicated that the financial markets are more pessimistic about the path of interest rates and that "it is likely that we’ll need to cut bank rates in the coming quarters, possibly more so than is currently priced into markets.”
However, he said a cut at the next meeting in June has “not been ruled out” but insisted that it was “not a fait accompli.”
Headline inflation in the U.K. is down at an annual rate of 3.2%, its lowest level in two and a half years, but remains higher than the bank’s 2% target.
In forecasts accompanying its decision, the Bank of England said it expects inflation to fall below the target between April and June, but rise again to 2.6% in the second half of this year as the impact of recent drops in energy prices fades.
Longer-term, it said it expects inflation to fall more than previously thought over the coming years to 1.5% in 2026. Given that it sets policy to target inflation months and years ahead, that's a further hint that rates will be cut soon.
That was certainly the view in financial markets, where the British pound fell against other currencies. It was down 0.4% against the dollar, for example, at $1.2450 in the immediate aftermath of the decision as traders priced in the prospect of lower returns on holding pounds.
The Bank of England, like the U.S. Fed and other central banks around the world, raised interest rates aggressively in late 2021 from near zero to counter price rises first stoked by supply chain issues during the coronavirus pandemic and then by Russia’s invasion of Ukraine.
Higher interest rates — which cool the economy by making it more expensive to borrow — have helped ease inflation, but they’ve also weighed on the British economy, which is barely growing.
“The decision to keep interest rates on hold, while expected, is a missed opportunity to provide much needed relief for those people struggling with their mortgage bills and businesses facing numerous cost pressures,” said Suren Thiru, economics director at the Institute of Chartered Accountants in England and Wales.
Lawmakers in the U.K.’s governing Conservative Party, which appears headed for a big electoral defeat later this year to the Labour Party, is hoping the independent Bank of England starts cutting soon, relieving the pressure on financially-stretched households, thereby helping to fuel an economic feelgood factor.
“What we want is sustainably low interest rates, and I think what’s encouraging is that the Bank of England governor, for the first time, has expressed real optimism that we’re on that path," said Treasury chief Jeremy Hunt.
Andrew Bailey, Governor of the Bank of England, speaks during the Bank of England Monetary Policy Report press conference at the Bank of England, London, Thursday May 9, 2024. (Yui Mok/PA via AP)
A general view of the Bank of England in London, Thursday May 9, 2024. The Bank of England has kept its main U.K. interest rate at a 16-year high of 5.25% with several policymakers still worrying about some key inflation measures. In a statement Thursday, the bank’s nine-member Monetary Policy Committee voted 7-2 to keep rates unchanged, with the 2 dissenters backing a quarter-point reduction. (Yui Mok/PA via AP)
Iranian President Ebrahim Raisi, the country’s foreign minister and others have been found dead at the site of a helicopter crash after an hourslong search through a foggy, mountainous region of the country’s northwest, state media reported.
State TV gave no immediate cause for the crash in Iran’s East Azerbaijan province. With Raisi were Iran’s Foreign Minister Hossein Amirabdollahian, the governor of Iran’s East Azerbaijan province and other officials and bodyguards, the state-run IRNA news agency reported.
Turkish authorities early Monday released what they described as drone footage showing what appeared to be a fire in the wilderness that they “suspected to be wreckage of a helicopter.” The coordinates listed in the footage put the fire some 20 kilometers (12 miles) south of the Azerbaijan-Iranian border on the side of a steep mountain.
Footage released by the IRNA early Monday showed what the agency described as the crash site, across a steep valley in a green mountain range. Soldiers speaking in the local Azeri language said: “There it is, we found it.” Shortly after, state TV in an on-screen scrolling text said: “There is no sign of life from people on board.”
Currently:
— Iran’s president, foreign minister and others found dead at helicopter crash site, state media says
— Iran President Ebrahim Raisi, supreme leader’s protégé, dies at 63 in helicopter crash
— Iran’s Foreign Minister Hossein Amirabdollahian, a hard-line diplomat, dies in helicopter crash
— Helicopter crash could reverberate across the Middle East, where Iran’s influence runs wide and deep
Follow AP’s coverage of Iran: https://apnews.com/hub/iran
Here's the latest:
ANKARA, Turkey — Turkish President Recep Tayyip Erdogan conveyed his condolences to the Iranian people and government over the deaths of Iranian President Ebrahim Raisi, Foreign Minister Hossein Amirabdollahian and other officials in a helicopter crash.
Erdogan said in a statement posted on social platform X that he remembers Raisi “with respect and gratitude” and praised his “efforts for the peace of the Iranian people and our region during his time in office.”
Turkish authorities dispatched a drone late on Sunday to help locate the wreckage and early on Monday released footage showing what appeared to be a fire in the wilderness that they “suspected to be the wreckage of a helicopter."
MOSCOW — Russian President Vladimir Putin on Monday extended his “deep condolences” to Iran’s Supreme Leader Ayatollah Ali Khamenei, calling the deaths of the country’s president and other officials a “huge tragedy” and “a difficult, irreparable loss.”
Iranian President Ebrahim Raisi, Putin said in a statement released by the Kremlin, was “an outstanding politician whose entire life was devoted to serving the Motherland.”
“He rightfully enjoyed high respect from his compatriots and significant authority abroad. As a true friend of Russia, he made an invaluable personal contribution to the development of good neighborly relations between our countries and made great efforts to bring them to the level of strategic partnership,” the Russian president said.
Putin said that he had met Raisi several times and “will forever retain the fondest memory of this wonderful man.”
BEIRUT — Lebanon’s caretaker Prime Minister Najib Mikati declared three days of mourning in the country in response to the death of Iranian President Ebrahim Raisi, with flags at official institutions to be flown at half-staff.
Lebanon’s political factions are deeply divided between those in support of Iran and its protege, Hezbollah, and those opposed to Iranian influence in the country.
Beirut — Syrian President Bashar Assad sent his condolences to Iran’s Supreme Leader Ayatollah Ali Khamenei over the deaths of the country’s president and foreign minister and their accompanying delegation. Iran’s intervention in the Syrian civil war on behalf of Assad’s embattled government helped to keep the Syrian president in power.
“We worked with the late president (Raisi) to ensure that the strategic relations between Syria and Iran remain prosperous always, and we will always remember his visit to Syria as an important milestone in this path, and all the visions and ideas that he presented to enrich relations with everything that benefits the Syrian and Iranian peoples,” Assad’s office said in a statement.
MOSCOW — Azerbaijan’s President Ilham Aliyev extended condolences to Iran’s supreme leader, saying in a statement that he and his government were “deeply shocked by the heavy loss that befell the brotherly and friendly Islamic Republic of Iran and its people.”
In Raisi “the people of Iran have lost an outstanding statesman who served his country selflessly and faithfully all his life. The bright memory of him will always live in our hearts,” Aliyev said.
BEIRUT — The Lebanese militant group Hezbollah, which has received substantial backing from Iran and is a senior member of its regional “axis of resistance,” mourned the deaths of the Iranian president and foreign minister in a statement.
It described Raisi as “a big brother to us, a strong supporter, and a staunch defender of our issues and the Arab nations’ issues, most notably Jerusalem and Palestine, and a protector of the resistance movements and those fighting on their behalf in all the positions of responsibility he held.”
CAIRO — Egyptian President Abdel Fattah el-Sissi of Egypt has mourned the death of Iranian President Ebrahim Raisi and other senior officials in a helicopter crash. In a statement, el-Sissi expressed his country’s solidarity with “the leadership and people of Iran in this great loss.”
TEHRAN — Iran’s Cabinet held an emergency meeting as state media announced the death of President Ebrahim Raisi.
The Cabinet offered its condolences, saying in a statement that he made the ultimate sacrifice in serving his country, according to a report by the state-run IRNA news agency. The report was accompanied by a photo of Raisi’s chair draped in black, his photo on the desk.
“We assure our loyal and appreciative and beloved nation that the path of service will continue with the tireless spirit of Ayatollah Raisi, the hero and the servant of the nation and the faithful friend of the leadership,” the Cabinet said in a statement carried by IRNA.
ISLAMABAD — Pakistan’s Prime Minister Shehbaz Sharif has announced a day of mourning over the death of Iranian President Ebrahim Raisi in a helicopter crash.
“I along with the government and people of Pakistan extend our deepest condolences and sympathies to the Iranian nation on this terrible loss. May the martyred souls rest in heavenly peace. The great Iranian nation will overcome this tragedy with customary courage,” Sharif wrote on the social platform X on Monday.
Sharif recently hosted Raisi and Iranian Foreign Minister Hossein Amirabdollahian when they visited Pakistan and said: “They were good friends of Pakistan."
Pakistan’s President Asif Ali Zardari in a statement also expressed shock and sorrow over Raisi's death. He extended his condolences to the bereaved families of the Iranian president, the foreign minister and others who died in the accident.
NEW DELHI — Indian Prime Minister Narendra Modi said he was deeply saddened and shocked by the news of Iranian President Ebrahim Raisi’s death, and sent his condolences to Raisi’s family and the people of Iran.
“India stands with Iran in this time of sorrow,” Modi said in a post on social platform X on Monday.
BAGHDAD — Iraqi Prime Minister Mohammed Shia al-Sudani, whose government coalition is close to Tehran, expressed “great sadness and great sorrow” in a statement on Monday after the deaths of Iranian President Ebrahim Raisi and others in a helicopter crash.
He also extended “sincere condolences” to Iran’s supreme leader and government and “solidarity with the brotherly Iranian people."
CAIRO — A Houthi leader in Yemen on Monday mourned the death of Iranian President Ebrahim Raisi and other senior officials who were killed in a helicopter crash.
“Our deepest condolences to the Iranian people and the Iranian leadership and to the families of the president and the accompanying delegation,” Mohamed Ali al-Houthi, the head of the Houthis’ Supreme Revolutionary Committees. “The Iranian people will continue to have leaders loyal to their people, God willing.”
Iran is the main backer of the Houthis in their yearslong war against Yemen’s internationally recognized government, which is backed by a Saudi-led military coalition.
DUBAI, United Arab Emirates — Iranian President Ebrahim Raisi, the country’s foreign minister and others have been found dead at the site of a helicopter crash after an hourslong search through a foggy, mountainous region of the country’s northwest, state media reported.
State TV gave no immediate cause for the crash in Iran’s East Azerbaijan province. With Raisi were Iran’s Foreign Minister Hossein Amirabdollahian, the governor of Iran’s East Azerbaijan province and other officials and bodyguards, the state-run IRNA news agency reported.
Turkish authorities early Monday released what they described as drone footage showing what appeared to be a fire in the wilderness that they “suspected to be wreckage of a helicopter.” The coordinates listed in the footage put the fire some 20 kilometers (12 miles) south of the Azerbaijan-Iranian border on the side of a steep mountain.
Footage released by the IRNA early Monday showed what the agency described as the crash site, across a steep valley in a green mountain range. Soldiers speaking in the local Azeri language said: “There it is, we found it.”
Shortly after, state TV in an on-screen scrolling text said: “There is no sign of life from people on board.” It did not elaborate, but the semiofficial Tasnim news agency showed rescuers using a small drone to fly over the site, with them speaking among themselves saying the same thing.
JERUSALEM — The crash of a helicopter carrying Iranian President Ebrahim Raisi, the country’s foreign minister and other officials is likely to reverberate across the Middle East.
That’s because Iran has spent decades supporting armed groups in Lebanon, Syria, Iraq, Yemen and the Palestinian territories that allow it to project power and potentially deter attacks from the United States or Israel, the sworn enemies of its 1979 Islamic Revolution.
Tensions have never been higher than they were last month, when Iran under Raisi and Supreme Leader Ayatollah Ali Khamenei launched hundreds of drones and ballistic missiles at Israel in response to an airstrike on an Iranian Consulate in Syria that killed two Iranian generals and five officers.
Israel, with the help of the U.S., Britain, Jordan and others, intercepted nearly all the projectiles. In response, Israel apparently launched its own strike against an air defense radar system in the Iranian city of Isfahan, causing no casualties but sending an unmistakable message.
The sides have waged a shadow war of covert operations and cyberattacks for years, but the exchange of fire in April was their first direct military confrontation.
People pray for President Ebrahim Raisi in a ceremony at Vali-e-Asr square in downtown Tehran, Iran, Sunday, May 19, 2024. A helicopter carrying President Raisi, the country's foreign minister and other officials apparently crashed in the mountainous northwest reaches of Iran on Sunday, sparking a massive rescue operation in a fog-shrouded forest as the public was urged to pray. (AP Photo/Vahid Salemi)
People pray for President Ebrahim Raisi in a ceremony at Vali-e-Asr square in downtown Tehran, Iran, Sunday, May 19, 2024. A helicopter carrying President Raisi, the country's foreign minister and other officials apparently crashed in the mountainous northwest reaches of Iran on Sunday, sparking a massive rescue operation in a fog-shrouded forest as the public was urged to pray. (AP Photo/Vahid Salemi)
People pray for President Ebrahim Raisi in a ceremony at Vali-e-Asr square in downtown Tehran, Iran, Sunday, May 19, 2024. A helicopter carrying President Raisi, the country's foreign minister and other officials apparently crashed in the mountainous northwest reaches of Iran on Sunday, sparking a massive rescue operation in a fog-shrouded forest as the public was urged to pray. (AP Photo/Vahid Salemi)
In this photo provided by the Azerbaijan's Presidential Press Office, Iranian President Ebrahim Raisi, left, shakes hands with his Azeri counterpart Ilham Aliyev during their meeting in the inauguration ceremony of dam of Qiz Qalasi, or Castel of Girl in Azeri, at the border of Iran and Azerbaijan, Sunday, May 19, 2024. A helicopter carrying Iranian President Ebrahim Raisi suffered a "hard landing" on Sunday, Iranian state media reported, without immediately elaborating. (Azerbaijani Presidential Press Office via AP)
People pray for President Ebrahim Raisi in a ceremony at Vali-e-Asr square in downtown Tehran, Iran, Sunday, May 19, 2024. A helicopter carrying President Raisi, the country's foreign minister and other officials apparently crashed in the mountainous northwest reaches of Iran on Sunday, sparking a massive rescue operation in a fog-shrouded forest as the public was urged to pray. (AP Photo/Vahid Salemi)
In this photo provided by Moj News Agency, rescue teams' vehicles are seen near the site of the incident of the helicopter carrying Iranian President Ebrahim Raisi in Varzaghan in northwestern Iran, Sunday, May 19, 2024. A helicopter carrying President Raisi, the country's foreign minister and other officials apparently crashed in the mountainous northwest reaches of Iran on Sunday, sparking a massive rescue operation in a fog-shrouded forest as the public was urged to pray. (Azin Haghighi, Moj News Agency via AP)
An Iranian woman prays for President Ebrahim Raisi in a ceremony at Vali-e-Asr square in downtown Tehran, Iran, Sunday, May 19, 2024. A helicopter carrying President Raisi, the country's foreign minister and other officials apparently crashed in the mountainous northwest reaches of Iran on Sunday, sparking a massive rescue operation in a fog-shrouded forest as the public was urged to pray. (AP Photo/Vahid Salemi)
In this photo provided by Moj News Agency, rescue teams' vehicles are seen near the site of the incident of the helicopter carrying Iranian President Ebrahim Raisi in Varzaghan in northwestern Iran, Sunday, May 19, 2024. A helicopter carrying President Raisi, the country's foreign minister and other officials apparently crashed in the mountainous northwest reaches of Iran on Sunday, sparking a massive rescue operation in a fog-shrouded forest as the public was urged to pray. (Azin Haghighi/Moj News Agency via AP)
In this photo provided by Islamic Republic News Agency, IRNA, the helicopter carrying Iranian President Ebrahim Raisi takes off at the Iranian border with Azerbaijan after President Raisi and his Azeri counterpart Ilham Aliyev inaugurated dam of Qiz Qalasi, or Castel of Girl in Azeri, Iran, Sunday, May 19, 2024. A helicopter carrying President Raisi suffered a "hard landing" on Sunday, Iranian state media reported, without elaborating. (Ali Hamed Haghdoust/IRNA via AP)
In this photo released by the official website of the office of the Iranian supreme leader, Supreme Leader Ayatollah Ali Khamenei speaks in meeting a group of families of the Revolutionary Guard members in Tehran, Iran, Sunday, May 19, 2024. A helicopter carrying Iranian President Ebrahim Raisi, the country's foreign minister and other officials apparently crashed in the mountainous northwest reaches of Iran on Sunday, sparking a massive rescue operation. "We hope that God the Almighty returns the dear president and his colleagues in full health to the arms of the nation," Khamenei said, drawing an "amen" from the audience he was addressing. (Office of the Iranian Supreme Leader via AP)
In this photo provided by Moj News Agency, rescue teams and people are seen near the site of the incident of the helicopter carrying Iranian President Ebrahim Raisi in Varzaghan in northwestern Iran, Sunday, May 19, 2024. A helicopter carrying President Raisi, the country's foreign minister and other officials apparently crashed in the mountainous northwest reaches of Iran on Sunday, sparking a massive rescue operation in a fog-shrouded forest as the public was urged to pray. (Azin Haghighi/Moj News Agency via AP)
