BoE Holds Firm as ECB and Fed Hike Rates

The Bank of England is set to keep its interest rates unchanged at 3.75% on Thursday, despite high inflation and soaring energy prices.

This decision diverges from the European Central Bank and the Federal Reserve, which have both raised their benchmark rates recently.

UK inflation reached a five-month high of 3.1% in August, driven by rising fuel prices, but core inflation remains steady at 2.6% for the fourth straight month.

Market participants expect the BoE to leave its Bank Rate unchanged, with ING economists saying that the UK's monetary policy is 'arguably already in contractionary territory'.