Bank of England Holds Rates, Signals Potential Hike Amid Rising Inflation Fears

The Bank of England has decided to keep interest rates on hold at 3.25%, but hinted that it could raise them soon to combat rising inflationary pressures.

The decision was widely anticipated, with six members of the Monetary Policy Committee voting to maintain the current rate, while three backed a quarter-point increase to 4%.

Bank Governor Andrew Bailey stated 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 likely lead to increased inflation in the long term.

The minutes accompanying the decision revealed that 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 domestic energy bills.