The decision to not to hike borrowing costs for the first time since December 2021.
London:
The Bank of England on Thursday held interest rates at 5.25 percent following a shock slowdown to UK inflation and one day after the US Federal Reserve also pressed pause.
The Bank of England (BoE) decided to keep borrowing costs at the highest level in more than 15 years after raising rates for 14 consecutive times due to soaring global inflation.
“Further tightening in monetary policy would be required if there were evidence of more persistent inflationary pressures,” said the BoE in the minutes of its latest regular policy meeting.
This decision, not to hike borrowing costs for the first time since December 2021, was a close call, with five out of nine policymakers, including governor Andrew Bailey, voting for a freeze.
Last month, the UK’s Consumer Prices Index dropped to 6.7 percent from 6.8 percent in July, which was the lowest level since February 2022, defying expectations of an increase to 7.1 percent due to higher energy prices.
In an attempt to curb inflation, the BoE began raising its key interest rate from a record low of 0.1 percent at the end of 2021 when inflation started to rise as economies gradually reopened from lockdowns.
Further tightening occurred as global inflation rose significantly following Russia’s invasion of Ukraine, which led to a surge in energy and food prices.
(Except for the headline, this story has not been edited by Newsbyteindia staff and is published from a syndicated feed.)
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