The Bank of England (BOE) decided on September 17 to maintain its base interest rate at 3.75%, but indicated that it may raise rates again if inflationary pressures from rising energy prices persist.
According to Reuters, the BOE's Monetary Policy Committee (MPC) voted to keep the interest rate steady, marking the sixth consecutive meeting this year where rates have not changed since a 0.25 percentage point cut in December. This decision aligns with market expectations.
However, only 6 of the 9 committee members supported the freeze, while 3 argued for a 0.25 percentage point increase to 4.00%. There has been growing speculation about further rate hikes due to inflationary pressures stemming from rising energy costs.
BOE Governor Andrew Bailey stated, "So far, the impact of rising global energy costs on UK prices and wage decisions has been limited." He added, "The longer the volatility lasts, the greater the impact on inflation, and the likelihood that we will need to raise the base rate to return to our 2% inflation target increases."
The UK's consumer price inflation rate for August was 3.1%, exceeding the BOE's target of 2%. The BOE warned that if energy prices remain volatile at high levels, inflation could surpass 4% early next year.
Recently, major central banks around the world have been tightening their monetary policies. The U.S. Federal Reserve raised its interest rate by 0.25 percentage points to a range of 3.75% to 4.00% the previous day, and the European Central Bank also increased its three key rates by 0.25 percentage points on September 10.
As a result, while the BOE has not raised rates immediately, the market is closely watching for potential future increases based on energy prices and inflation trends. Reuters reported that financial markets are reflecting the possibility of a rate hike in November.
* This article has been translated by AI.
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