BoE Holds Interest Rates Steady Amid Rising Inflation Concerns

The Bank of England (BoE) surprised markets by keeping interest rates steady despite inflation running above target, sparking concerns it may be falling behind in the battle against rising prices.

Inflation climbed to 3.1% in August, its first move above 3% since March, and policymakers held rates at a range of 3.75% to 4%, its first hike since 2023.

The decision follows a rate rise announced yesterday by the European Central Bank (ECB), which lifted rates to 2.5% last week, and the Bank of Japan, which looks poised to move within days.

Britain's exposure to energy prices makes delay especially dangerous, with motor fuel costs surging 23% year-on-year in August, a key driver of the inflation spike, according to the ONS.