THE BANK OF ENGLAND (BoE) on Thursday kept its key interest rate unchanged at 4.75 per cent, opting not to follow the US Federal Reserve's recent rate cut, as inflation in the UK sees an uptick.
"We've held interest rates today following the two cuts since the summer," BoE Governor Andrew Bailey said in a statement.
Bailey emphasised the importance of meeting the two per cent inflation target, saying, "We need to make sure we meet the two-percent inflation target on a sustained basis."
His comments came after UK annual inflation rose to 2.6 per cent, according to data released earlier this week.
The decision to hold rates contrasts with the US Federal Reserve, which cut borrowing costs by a quarter-point on Wednesday while signalling fewer rate reductions for the coming year.
Last week, the European Central Bank also reduced eurozone rates, while the Bank of Japan left its rates unchanged in an announcement on Thursday.
Chancellor Rachel Reeves expressed support for the BoE’s decision, acknowledging the challenges it poses for households.
"I know families are still struggling with high costs," Reeves said. "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."
Had the BoE opted to lower its rate, retail banks might have reduced borrowing costs, including on mortgages, potentially easing pressure on consumers.
(With inputs from Reuters)
Pope Francis greets Narendra Modi on the sidelines of the G7 summit near Bari, Italy, in June last year, as Italian prime minister Giorgia Meloni and then British prime minister Rishi Sunak look on
