LONDON (AP) — The Bank of England kept its main interest rate unchanged at 3.75% on Thursday with U.K. inflation remaining above target and economic growth is showing signs of picking up.
The decision was widely anticipated in financial markets but the split on the nine-member rate-setting panel was much closer than expected. Five members of the Monetary Policy Committee opted to keep rates unchanged while four voted for a quarter-point cut.
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People walk in front of the Bank of England, at the financial district in London, Thursday, Feb. 5, 2026 as the Bank of England holding its first interest rate meeting in 2026 at a time when inflation in the UK remains above target and economic growth is stubbornly low. (AP Photo/Kin Cheung)
A man walks in front of the Bank of England, at the financial district in London, Thursday, Feb. 5, 2026 as the Bank of England holding its first interest rate meeting in 2026 at a time when inflation in the UK remains above target and economic growth is stubbornly low. (AP Photo/Kin Cheung)
A man walks in front of the Bank of England, at the financial district in London, Thursday, Feb. 5, 2026 as the Bank of England holding its first interest rate meeting in 2026 at a time when inflation in the UK remains above target and economic growth is stubbornly low. (AP Photo/Kin Cheung)
FILE - Pedestrians pass the Bank of England in London, on Dec. 18, 2025. (AP Photo/Kirsty Wigglesworth, File)
The central bank, which sets interest rates for the whole of the U.K., has been steadily reducing interest rates over the past 18 months, more often than not every three months. It last cut its key rate in December and indicated that further reductions are likely this year.
Economic forecasts accompanying the decision reinforced the view that further rate cuts are in the offing, as the bank is predicting that inflation will fall back to its 2% target in the coming months from 3.4% currently.
That's around a year earlier than previously thought. It said a series of measures to reduce the cost of living, particularly with regard to energy bills, that were announced in November's annual budget by Treasury chief Rachel Reeves were largely behind the faster drop.
“We now think that inflation will fall back to around 2% by the spring," said Bank Governor Andrew Bailey. “That’s good news. We need to make sure that inflation stays there, so we’ve held rates unchanged at 3.75% today. All going well, there should be scope for some further reduction in Bank Rate this year.”
Britain’s Labour government, which has lost significant support since it won the general election in 2024 partly because of the economy, is counting on inflation falling sharply this year, which would allow the central bank to further reduce borrowing costs.
While painting a rosier inflation picture, the central bank downgraded its growth forecasts for the British economy this year, from 1.2% to 0.9%, and for 2027, from 1.6% to 1.5%. It is also expecting the unemployment rate to rise to 5.3% this year, having said in November that it would peak at 5.1%
Lower interest rates help spur economic growth by reducing borrowing costs, which can lead to increased spending by consumers and boost investment by businesses. But that can also fuel higher prices.
Following Thursday's decision and the tight vote split, economists said there are likely to be at least two more quarter-point rate cuts this year.
“A cut at the next meeting in March is most certainly on the table,” said Luke Bartholomew, deputy chief economist at asset management firm Aberdeen. "And even if it takes a bit longer for the next cut to come through, we still think there is a strong case for rates to eventually fall to 3% later this year.”
People walk in front of the Bank of England, at the financial district in London, Thursday, Feb. 5, 2026 as the Bank of England holding its first interest rate meeting in 2026 at a time when inflation in the UK remains above target and economic growth is stubbornly low. (AP Photo/Kin Cheung)
A man walks in front of the Bank of England, at the financial district in London, Thursday, Feb. 5, 2026 as the Bank of England holding its first interest rate meeting in 2026 at a time when inflation in the UK remains above target and economic growth is stubbornly low. (AP Photo/Kin Cheung)
A man walks in front of the Bank of England, at the financial district in London, Thursday, Feb. 5, 2026 as the Bank of England holding its first interest rate meeting in 2026 at a time when inflation in the UK remains above target and economic growth is stubbornly low. (AP Photo/Kin Cheung)
FILE - Pedestrians pass the Bank of England in London, on Dec. 18, 2025. (AP Photo/Kirsty Wigglesworth, File)
NASHVILLE, Tenn. (AP) — A new Tennessee law has eased up on two longstanding financial hurdles for people with felony sentences who want their voting rights back, including a unique requirement among states that they must have fully paid their child support costs.
The Republican-supermajority Legislature approved the Democratic-sponsored change, which now lets people prove they have complied for the last year with child support orders, such as payment plans. The legislation also unties the payment of all court costs from voting rights restoration.
Advocates for years have sought various changes to Tennessee’s voting rights restoration system at the statehouse and in court. They say loosening these two rules marks the biggest rollback of restrictions to voting rights restoration in decades.
“This is huge and this is history,” said Keeda Haynes, senior attorney for the advocacy group Free Hearts led by formerly incarcerated women like her.
Most Republicans voted for it and Democrats supported it unanimously. The law took effect immediately upon Republican Gov. Bill Lee's signature last week.
“I think people are at a point where they want to just remove the barriers out of the way and allow people to be fully functional members of society,” said Democratic House Minority Leader Karen Camper, a bill sponsor.
In 2023 and early 2024, the state decided that the system did require going to court or showing proof of a pardon, not just a paperwork process, and that gun rights were required to restore the right to vote. Election officials said a court ruling made the changes necessary, though voting rights advocates said officials misinterpreted the order.
Last year, lawmakers untangled voting and gun rights. But voting rights advocates opposed some of the bill's other provisions, such as keeping the process in the courts, where costs can rack up if someone isn't ruled indigent.
Easing up on the financial requirements uncommonly split legislative Republicans. For instance, Senate Speaker Randy McNally voted against it, while House Speaker Cameron Sexton supported it, noting that people aren't getting forgiveness on making their payments.
“They need to continue paying that, and as long as they do, then there’s a possibility (to restore their voting rights)," Sexton said. "I really think that’s harder for people to argue against than maybe what something else was.”
Republican Rep. Johnny Garrett, who voted no, said in committee his vote would hinge on whether “there still can be an (child support) arrearage owed beyond that 12 months.”
For some, backed-up child support payments could reach hundreds or thousands of dollars, and court costs could be hundreds or thousands more, said Gicola Lane, Campaign Legal Center's Restore Your Vote community partnership senior manager.
Advocates credited their narrowed focus, omitting goals such as automatic restoration of rights, no longer tying restitution payments to voting rights, or offering a path for certain people to restore their right who are permanently disenfranchised, including those convicted of voter fraud or most murder charges.
The bill passed the Senate last year and the House this year.
Lawmakers gave the child support requirement final passage in 2006 within an overhaul bill that also created a voting rights restoration process outside of court. Critics said the child support rule penalized impoverished parents.
Democrats were then narrowly hanging onto legislative leadership in both chambers. Republicans held a slim Senate majority but GOP defectors voted for a Democratic speaker.
Last year marked the dismissal of a nearly five-year-old federal lawsuit over Tennessee’s voting-rights restoration system. Free Hearts and the Campaign Legal Center represented plaintiffs in the long-delayed case, which saw some election policy changes along the way.
Roughly 184,000 people have completed supervision for felonies and their offenses don't preclude them from restoring their voting rights, according to a plaintiffs expert’s 2023 estimate in the lawsuit. About one in 10 were estimated to have outstanding child support payments, and more than six in 10 owed court courts, restitution or both, the expert said.
Both Republican and Democratic-led states have eased the voting rights restoration process in recent years. Some states have added complexities.
In Florida, after voters approved a constitutional amendment in 2018 restoring the right to vote for people with felony convictions, the Republican-controlled Legislature watered that down by requiring payment of fines, fees and court costs.
Voting rights are automatically restored upon release in nearly half of states. In 15 others, it occurs after parole, probation or a similar period and sometimes requires paying outstanding court costs, according to the National Conference of State Legislatures. In Maine and Vermont, people with felonies keep their voting rights in prison, the NCSL says.
Ten other states including Tennessee require additional government action. Virginia ’s governor must intervene to restore voting rights of people convicted of felonies. In some states, including Tennessee, certain conviction types render someone ineligible.
However, Virginia lawmakers this year have passed a proposed state constitutional amendment to ask voters whether they want automatic voting rights restoration after someone is released from prison. Kentucky lawmakers have proposed a similar change for voters' consideration that would automatically restore voting rights after certain completed sentences, including probation.
FILE - The Tennessee Capitol is seen, Jan. 22, 2024, in Nashville, Tenn. (AP Photo/George Walker IV, File)
