Bank of England Eyes Rate Hike as Inflation Bites

The Bank of England has decided to keep interest rates unchanged at its latest meeting, but has indicated that it may hike them soon to combat inflationary pressures.

In a widely anticipated move, six members of the Monetary Policy Committee voted to maintain the current rate, while three backed a quarter-point increase to 4%.

Bank Governor Andrew Bailey noted that higher global energy costs have had a limited effect on price and wage setting in the U.K. so far, but warned that this volatility will eventually impact inflation, making a rate hike more likely.

The minutes accompanying the decision showed that inflation is expected to rise to around 4% in the first quarter of next year, up from the current 3.1%, as households face another increase in their domestic energy bills.