Bank of England Holds Interest Rates at 3.75%
The Bank of England kept interest rates unchanged Thursday. The rate stays at 3.75%.
This came as UK inflation rose to 3.1%. Rising energy costs are pushing prices higher.
The Bank's policy group voted 6-3 to hold rates. Three members wanted to raise rates to 4%.
The Bank warned it may raise rates if inflation keeps rising. Conflict in the Middle East has made energy prices unstable.
The Bank expects inflation to reach about 3.75% by late 2026. It could rise slightly above 4% in early 2027.
The decision came one day after new inflation data. That data showed the fastest price increases in months.
The result matched what experts had expected. The Bank is also changing how it reduces its balance sheet.
The US Federal Reserve had raised its own rates earlier. The Bank of England's next rate decision comes November 5 2026.
Key Terms 4
- Bank of England The United Kingdom's central bank that sets interest rates.
- inflation How fast prices for goods rise over time.
- balance sheet A bank's record of what it owns and owes.
- Federal Reserve The central bank of the United States.