The Bank of England maintained interest rates at 5.25 percent, the highest level since 2008, despite inflation easing to 2 percent in May. Policy makers believe that the current high rates are effectively cooling the labor market and reducing price pressures. However, they remain cautious and plan to keep rates restrictive until they are confident that inflation will remain low. Governor Andrew Bailey expressed satisfaction that inflation has returned to the 2 percent target, but emphasized the need to ensure it stays low. This decision comes amidst a global trend of central banks debating the timing and extent of interest rate cuts. The European Central Bank recently cut rates for the first time in five years, while the U.S. Federal Reserve indicated a reduction in rates only once this year, a change from their original projection of three cuts.