BoE Holds Rates Steady as US Fed Resumes Rate Hikes Amid Inflation Fears

The Bank of England held its benchmark interest rate steady at 3.75 percent for a sixth consecutive meeting, while the US Federal Reserve raised rates by 25 basis points to 3.75-4.00 percent.

The decision was in line with market expectations and reflects contrasting economic conditions between the two central banks. The BoE's Monetary Policy Committee voted 6-3 to keep the Bank Rate at 3.75 percent, with three members again backing a 25-basis-point increase to four percent.

The MPC cited prolonged conflict in the Middle East as the main driver of higher crude and refined energy prices, which have contributed to a rise in UK consumer price inflation to 3.1 percent in August.

The BoE warned that inflation could rise to around four percent in early 2027 as higher energy prices pass through to households and businesses.