Central banks set to hold rates despite inflation pressures.
The Bank of England held interest rates at 3.75% Thursday and warned inflation could rise well above its 2% target. Governor Andrew Bailey said prolonged Middle East conflict may force tighter policy.
- 6 MPC members voted to hold; 3 voted to raise rates to 4%.
- 3.1% inflation in August rose from 2.9% in July, a five-month high.
- BoE now forecasts inflation reaching slightly over 4% in early 2027.
- Active gilt sales are paused for the next six months while a new plan is finalized.
Why it matters: The Iran war has sharply raised oil and gas prices, partly because the Strait of Hormuz has been largely closed to traffic. UK households face another energy bill increase in October.
- Higher rate expectations raise the government's debt-servicing costs.
- David Rees of Schroders said a soft labor market should slow the pass-through of import costs into wages and domestic prices.
How 16 sources split on this story
Where they split: Coverage agrees on the hold decision but differs in emphasis: Reuters focuses on the BoE's hawkish shift in tone, while The Independent stresses the economic softness that still argues against an immediate hike.
Center coverage, 7 sources: The center treats the decision as a turning point, leading with the BoE's hawkish pivot, the three dissenting votes for an immediate hike, and the high probability of a rate rise by year-end.
Reuters3hBoE's Bailey says outlook too uncertain to judge market bets on four rate hikesCNCTV News2hBank of England holds rates but appears ready to hike soon
Associated Press5hBank of England holds rates but appears ready to hike soon
CNBC12hBank of England set to defy Fed’s rate-hike lead, despite rising inflationIBTIBTimes5hBritish Inflation Is Running Above Its Target. The Bank Of England Decided To Leave Rates Unchanged.KSAKSAT 12 San Antonio12hBank of England expected to keep interest rates unchanged despite rising inflation
Sky News10hBank of England issues stark warning on energy price hike aheadLeft coverage, 3 sources: The left frames the rate hold as a reprieve for households and a sign that the labor market's softness justifies caution, while noting the Iran war's spillover costs on ordinary borrowers.
The Epoch Times17hBank of England Holds Interest Rate, Warns Middle East Conflict Is Heightening Inflation Risks
The Sun40mBank of England boss warns more pain for households as Iran war pushes up costs
Citizen Free Press3hBank of England leaves interest rates unchanged — Smart move compared to Federal Reserve.
Daily Mail7hBrits face interest rates pain in Labour's 'winter of discontent' as pressure mounts on BoE to curb surging inflation... but will it act today?
Wall Street Journal6hWhy the Bank of England Didn’t Follow the Fed in Raising Interest Rates
ZeroHedge5hUK Gilt Yields Tumble As BoE Scraps Bond Sales, Holds Rates (As Expected)What’s next: The MPC's November 5 meeting is seen as the most likely moment for a rate increase.
- Felix Feather of Aberdeen said November is a natural starting point for a hiking cycle.
- The government's October 28 budget could affect the inflation outlook before that meeting.
- Will October energy bill increases feed into wages and prices enough to force a November hike?
- How will the government's October budget interact with the BoE's rate path?