The Bank of England BoE has decided to keep its key interest rate steady at 4%, citing stubbornly high inflation despite signs of economic stagnation and rising unemployment.
The move, which was widely anticipated by financial markets, follows a similar decision by other major central banks, even as the U.S. Federal Reserve opted to cut interest rates for the first time this year.
Official figures showed that UK annual inflation stood at 3.8% in August, with the BoE forecasting it to peak at 4% this month. While this is a drop from previous highs, it remains well above the central bank’s 2% target.
