BoE Holds Rates Steady Amid Inflation Risks
The Bank of England (BoE) kept its benchmark interest rate unchanged at 3.75% on Thursday, in line with market expectations.
The decision was made by a 6-3 vote, with six members supporting the status quo and three dissenting voices calling for a 25-basis-point increase.
MPC members Megan Greene, Huw Pill, and Catherine Mann argued that inflation remains above target despite recent progress in reducing it to 2.6% in June, its lowest level in 15 months.
The BoE warned that energy price risks remain tilted to the upside, with potential disruptions in the Red Sea and AI-related hardware shortages posing supply-side threats.
Economists interpreted the decision as a 'more hawkish hold' than expected, with analysts at Aberdeen describing the move and Goldman Sachs Asset Management warning of possible rate hikes if Middle East tensions escalate.