BoE Holds Rates as Inflation Hits Five-Month High

The Bank of England has decided to keep interest rates at 3.75%, despite concerns over rising inflation.

In a closely watched decision, the Monetary Policy Committee voted six to three to hold borrowing costs unchanged. The dissenting minority had called for a quarter-point increase to 4%.

The 'Old Lady of Threadneedle Street' is at odds with other major central banks, which have tightened monetary policy in recent days. The Federal Reserve and the European Central Bank both raised rates last week.

The Bank of England expects inflation to worsen before it improves, driven by high energy prices. Crude oil has risen 36% since July, while UK wholesale gas prices are up 78%. Refinery pressures have kept fuel prices well above pre-conflict levels.