BOE Keeps Interest Rates Steady Amid Global Energy Cost Concerns

The Bank of England's Monetary Policy Committee (MPC) has decided to maintain interest rates at 3.75 per cent for the sixth time in a row. This decision was made despite pressure from three MPC members who voted to increase Bank Rate by 0.25 percentage points, to 4 per cent.

At its meeting this week, the MPC weighed the impact of global energy costs on inflation and price setting in the UK. Governor Andrew Bailey noted that so far, higher global energy costs have had a limited effect on price and wage setting in the UK.

However, he warned that 'the longer this volatility persists, the bigger the impact it will have on inflation, and the more likely it is we will need to raise Bank rate to ensure that inflation falls back to our 2 per cent target.'