Bank of England Holds Firm on Interest Rates Amid Rising Inflation

The Bank of England is widely expected to keep interest rates unchanged at 3.75% despite rising inflation in the UK, which hit a five-month high of 3.1% in August.

Economists believe that a majority of the Monetary Policy Committee will want to see more evidence that higher inflation is feeding into underlying prices and wages before making a decision.

The increase in consumer prices was largely driven by rising fuel prices, which were exacerbated by the Iran war. Despite this, David Rees from Schroders argues that 'that should limit the extent to which imported price pressures become embedded in domestic wages and prices.'