Bank of England keeps interest rate steady at 3.75 percent
The bank's Monetary Policy Committee signaled that new rate hikes could be made in the future due to inflation risks originating from the Middle East.
The Bank of England left its benchmark interest rate unchanged at 3.75 percent despite warnings of inflationary pressure triggered by conflicts in the Middle East.
Interest Rate Decision and Committee Distribution
The Bank of England decided to keep the benchmark interest rate steady at 3.75 percent. Six members of the Monetary Policy Committee, including Governor Andrew Bailey, voted to keep rates unchanged.
The members who voted to raise interest rates on the committee were Catherine Mann, Megan Greene, and Huw Pill.
Inflation and Growth Expectations
The bank expects inflation to double its 2 percent target early next year. Meanwhile, the gross domestic product growth forecast for the third quarter was raised to 0.4 percent.
It was emphasized that the effects of the global energy shock remain limited for now, but a rate hike would become more likely if volatility continues.
Bond Sale Plan Abandoned
The bank announced that it has abandoned plans for long-term government bond sales. The statement noted that the 488 billion pound debt portfolio will be wound down by September 2034.