Bank of England Expected to Hold Steady on Interest Rates Amid Inflation Concerns

The Bank of England is anticipated to keep its interest rates unchanged despite a significant cut from the US Federal Reserve. Economists predict that the Monetary Policy Committee will maintain the 5% rate due to persistent inflation concerns. The UK saw a steady inflation rate in August at 2.2%, just above the bank's 2% target.

The Bank of England is anticipated to announce it will maintain current interest rates later today, despite the US Federal Reserve enacting its first rate cut since the pandemic's onset.

Economists suggest that a narrow majority of the Monetary Policy Committee will vote to keep the rate at 5%, given enduring inflation fears within the key services sector of the economy, which comprises about 80% of Britain's economic activity.

Recent figures indicated that UK inflation remained stable at an annual rate of 2.2% in August, with increased airfare costs balancing out reduced fuel expenses. This leaves inflation slightly above the central bank's 2% target for the second consecutive month.

(With inputs from agencies.)