BOE Sticks to Rate Hold as Inflation Hits Five-Month High

The Bank of England is expected to keep interest rates at 3.75% when it meets on Thursday, despite rising inflation. Most economists think the Monetary Policy Committee will opt for a 'wait-and-see' approach, particularly in regards to the Middle East conflict and its impact on the UK economy.

Three members of the nine-person MPC - Huw Pill, Megan Greene, and Catherine Mann - voted to hike rates to 4% at the last meeting. Economists expect them to do so again this time around.

Rising prices in the UK have pushed Consumer Prices Index (CPI) inflation to a five-month high of 3.1% in August. Services inflation, which reflects prices in the UK's dominant industry, stayed at 3.4%. However, experts warn that household energy bills are set to rise again next month, which could prompt the Bank to raise interest rates.

Thomas Pugh, chief economist at RSM UK, said: 'The rise in inflation in August is just the start of a new upward trend as higher energy, food and memory chip prices continue to make their way through supply chains.'