BOE Holds Rates as Energy Prices Fail to Broaden Inflation

The Bank of England may not be as hawkish as markets expect, according to recent predictions. The central bank is likely to keep interest rates on hold at 3.75% with a 6-3 vote at its September meeting.

This decision would mark the seventh consecutive month that rates remain unchanged. The Bank's doves are increasingly confident in their view that the UK economy is less susceptible to inflation waves, citing low second-round effects and stable wage growth.

In July, the Bank predicted up to four rate hikes due to energy prices, but recent data shows that these prices may not be as high for long. The Bank's decision will also depend on its quantitative tightening program, which is expected to slow down to £50bn per year from £70bn last year.