LONDON -- The Bank of England (BoE), the United Kingdom's (UK) central bank, announced on Thursday that it will maintain its benchmark interest rate at 5.25 percent for the sixth consecutive time.

At its meeting ending on Wednesday, the BoE's Monetary Policy Committee (MPC) voted 7-2 to maintain the rate. Two members advocated for a reduction of 0.25 percentage points to bring the rate down to 5 percent.

According to the bank, following a period of moderate weakness last year, the UK GDP was expected to increase by 0.4 percent in the first three months of 2024 and is projected to grow by 0.2 percent in the second quarter.

The BoE anticipates that inflation will return to close to the 2 percent target in the near term but is likely to increase slightly in the second half of this year, reaching around 2.5 percent, owing to the unwinding of energy-related base effects.

"There continue to be upside risks to the near-term inflation outlook from geopolitical factors, although developments in the Middle East have had a limited impact on oil prices so far," stated the Bank in its statement.

Recent data indicates that the UK's headline inflation fell to 3.2 percent in March, its lowest annual rate in two and a half years.

"Conditioned on market interest rates and reflecting a margin of slack in the economy, CPI inflation is projected to be 1.9 percent in two years' time and 1.6 percent in three years in the May Report," the Bank added.