Bank of England Holds Steady on Interest Rates Amid Inflation Concerns

The Bank of England maintained its main interest rate at 5%, despite a significant rate cut from the US Federal Reserve. This decision, expected due to inflation concerns, comes as central banks globally adjust their borrowing costs post-pandemic. One panel member voted for a rate cut, while most anticipate reductions in the near future.

The Bank of England held its main interest rate at 5% on Thursday, despite a major cut from the US Federal Reserve - its first reduction since the pandemic began over four years ago.

The decision was anticipated, given the ongoing inflation concerns within the bank's monetary policy committee. Inflation in the UK steadied at 2.2% in August, above the bank's target. One panel member voted for a rate cut, while the remaining eight opted for stability.

Governor Andrew Bailey stated that if the economy continues its current trajectory, gradual rate reductions could follow. However, cautiousness is necessary to ensure inflation remains controlled. The bank is expected to cut rates again in November, considering the upcoming government budget.

(With inputs from agencies.)