BoE Holds Rates Amid Rising Inflation, Fed Hikes

The Bank of England (BoE) has decided to hold its interest rate at 3.75%, despite rising UK inflation and the Federal Reserve's decision to hike rates in the US.

This divergence is due to the source of inflation, with energy prices being a major contributor.

Governor Andrew Bailey argues that interest rates cannot directly fix an oil-driven price shock and sees little evidence of higher energy costs spreading into wages.

The Federal Reserve, on the other hand, chose to act quickly due to its own inflation concerns and a stronger labor market.