Bank of England Holds Interest Rate as Inflation Surpasses Target

The Bank of England has left its key interest rate unchanged at 3.75% despite inflation rising to 3.1% in August, exceeding the regulator's 2% target.

This is the first time since March that inflation has surpassed 3%, with a significant part attributed to rising motor fuel costs, which increased by 23% year on year.

The UK is vulnerable to external energy price shocks due to its status as a net energy importer and is still recovering from a cost-of-living crisis sparked by post-COVID-19 inflation and Russia's war against Ukraine.

Market expectations had predicted a 76% chance of keeping the rate at its current level, but experts expect an increase of at least 25 basis points at the Bank of England's next meeting in November.