Bank of England holds interest rate at 4% over high inflation concerns

LONDON (AP) — The Bank of England held its main interest rate at 4% on Thursday as inflation in the U.K. remains almost double its target of 2%.

The decision was widely anticipated, as was the split of votes on the nine-member Monetary Policy Committee. Seven of the panel backed the decision, while two voted for a quarter-point reduction to 3.75%.

All eyes now turn to the next rate-setting meeting in November. If the bank carries on cutting interest rates once every three months, as it has since August 2024, then it will make a further cut in November. It last reduced interest rates in August.

However, inflation in the U.K. remains stubbornly high. Figures on Wednesday showed inflation held steady at 3.8% in the year to August.

The bank has been cutting interest rates at a gradual pace following the unwinding of the previous spike in inflation in the wake of Russia’s invasion of Ukraine.

However, economists remain split as to whether another cut will be forthcoming since inflation has proven to be stickier than anticipated, partly because of relatively high wage increases.