Bank of England holds UK interest rate steady at 3.75% — but policymakers see upside inflation risk
📰 source: cnbc_topnews · 💼 business
the bank of england held its key interest rate at 3.75% on thursday, as widely expected. the monetary policy committee voted 6-3 to keep the benchmark rate unchanged, with three members — megan greene, huw pill and catherine mann — voting for a 25 basis point hike. the boe said all members agreed that risks to energy prices remained skewed to the upside.
the dissenting members cited persistent inflation above target for about five years, along with additional supply risks from a second energy chokepoint in the red sea and ai-related hardware constraints. greene argued that a proactive rate hike could reduce the probability of second-round effects. pill warned of profound uncertainty around the energy price outlook, calling for a clear signal to address upside inflation risks.
analysts at aberdeen said the increase in dissenters from two to three suggests growing concern within the committee, raising the likelihood of rate hikes if inflation doesn't ease further. goldman sachs asset management noted the boe is happy to sit tight for now but a persistent middle east shock could keep a september meeting live. the pound edged up 0.08% against the dollar to $1.3376.
why it matters: boe holds rates but three dissenters push for hike, signaling upside inflation risks from energy and supply chains may force tightening soon.
source: cnbc_topnews
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