BoE Keeps Rates on Hold Amid Global Uncertainty

The Bank of England kept interest rates at 3.75% as expected on Thursday, but one policymaker voted to increase it to 4%. The Monetary Policy Committee (MPC) voted 6-3 to maintain the current rate, with three members, Catherine Mann, Megan Greene, and Chief Economist Huw Pill, supporting a hike.

Bank of England Governor Andrew Bailey stated that holding rates is appropriate due to global uncertainty and inflationary pressures. He emphasized that domestic conditions are more benign regarding inflation prospects.

The decision was seen as a relief for the new UK government, which has prioritized cost-of-living measures, including scrapping a tax on household electricity bills. The Bank of England's central forecast predicts inflation rising to 3.2% later this year from a 15-month low of 2.6% in June.