Bank of England Set to Hold Interest Rates Amid Rising UK Inflation
The Bank of England is expected to keep interest rates unchanged at its next meeting on Thursday, despite rising inflation. This would be the sixth time in a row that the Monetary Policy Committee (MPC) has kept rates on hold since December.
Most economists think the MPC will continue to favour a 'wait-and-see' approach, particularly with regards to the Middle East conflict and its impact on the UK economy. However, three members of the nine-person MPC - Huw Pill, Megan Greene, and Catherine Mann - voted to hike rates to 4% at the last meeting, and economists expect the same outcome this time around.
Rising prices in the UK have seen Consumer Prices Index (CPI) inflation increase to 3.1% in August, from 2.9% in July, marking a five-month high. This has moved CPI inflation further away from the Bank of England's 2% target rate.