Bank of England Holds Interest Rate Amid Inflation Concerns

The Bank of England has decided to keep its main interest rate at 3.75%, despite higher inflation and pressure from global energy costs.

This decision was widely anticipated, with six members of the Monetary Policy Committee voting to keep rates unchanged, while three backed a quarter-point increase to 4%.

The bank's governor, Andrew Bailey, said that so far, higher global energy costs have had a limited effect on price and wage setting in the U.K. However, he warned that this could change if volatility persists, making it more likely for the bank to raise rates to ensure inflation falls back to its 2% target.

Inflation is expected to rise to around 4% in the first quarter of next year from the current 3.1%, as households face another increase in their domestic energy bills.