BoE Expected to Hold Rates as Energy Costs Fuel Inflation Pressures

The Bank of England is expected to keep interest rates unchanged at 3.75% this week, despite rising energy costs and inflation pressures.

A poll by Reuters found that most economists expect the BoE to hold rates steady for the rest of the year, with only three of nine Monetary Policy Committee members seen backing a hike this week.

The surge in Brent crude and British natural gas futures has added pressure to inflation, which stands at 3.1% in August and remains above the BoE's 2% target.

J.P. Morgan economist Allan Monks believes that the BoE is likely to stay on hold this week to avoid reinforcing expectations of a rapid tightening cycle, but expects a move in November.