LONDON: The Bank of England on Thursday kept its key interest rate at 4.75 percent, deciding against a cut in line with the US Federal Reserve, as UK inflation rises again.
“We’ve held interest rates today following the two cuts since the summer,” BoE governor Andrew Bailey said in a statement.
“We need to make sure we meet the two-percent inflation target on a sustained basis,” he added following a regular policy meeting and after data this week showed UK annual inflation rising to 2.6 percent.
The expected rate decision came a day after the Fed cut US borrowing costs by a quarter-point but signalled fewer reductions for next year.
US Fed cuts rate by quarter-point in third straight reduction
The European Central Bank cut eurozone rates last week while the Bank of Japan made no change in a decision announced Thursday.
Britain’s finance minister Rachel Reeves said she supported the latest BoE call despite the pressure that it puts on Britons.
Had the BoE cut its rate, retail banks would likely have followed suit by reducing borrowing costs on mortgages.
“I know families are still struggling with high costs,” Reeves said Thursday.
“We want to put more money in the pockets of working people, but that is only possible if inflation is stable and I fully back the Bank of England to achieve that.”
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