Bank of England Puts Brake on Rate Hike as Inflation Looms

The Bank of England has decided to keep its main interest rate at 3.75% despite rising inflation, which is expected to reach 4% in the first quarter of next year.

This decision was widely anticipated by economists and financial markets, who believe that the bank will raise rates soon to combat inflationary pressures caused by higher global energy costs.

The Bank Governor Andrew Bailey said that so far, higher energy costs have had a limited effect on price and wage setting in the U.K., but warned that this volatility could persist and impact inflation further.

The minutes accompanying the decision showed that the bank's rate-setters are concerned about inflation rising above their 2% target and may consider raising borrowing costs at one of the next two policy meetings, either in November or December.