Bank of England Sounds Inflation Alarm Amid Rising Energy Prices
The Bank of England has sounded an inflation alarm, warning that British inflation will top 4% early next year. Despite this, the central bank chose to hold interest rates unchanged on Thursday.
In a decision that saw a vote split of 6-3, the BoE cited rising energy prices as a key driver of the increased inflation risk. This development has put the UK's economy under pressure, prompting some experts to speculate about potential rate hikes in the near future.
Andrew Bailey, Governor of the Bank of England, explicitly mentioned that prolonged conflict in the Middle East may require tighter policy measures. The BoE also announced a tweak in its plans to run down existing holdings of UK government bonds, halting sales to the market for now and boosting gilt prices.