The Bank of England on Thursday held interest rates at 5.25 percent following a shock slowdown to UK inflation and one day after the US Federal Reserve also pressed pause.
The BoE decision to freeze borrowing costs at the highest level in more than 15 years followed 14 straight hikes after global inflation soared to the highest levels in decades.
“Further tightening in monetary policy would be required if there were evidence of more persistent inflationary pressures,” the BoE said in minutes of its latest regular policy meeting.
The decision to not to hike borrowing costs for the first time since December 2021 was a close call with five of the nine policymakers, including governor Andrew Bailey, voting for a freeze.
Britain’s Consumer Prices Index eased to 6.7 percent last month from 6.8 percent in July, data showed Wednesday.
That was the lowest since February 2022 and confounded expectations for an acceleration to 7.1 percent on higher energy prices.
In a bid to cool prices, the BoE began lifting its key interest rate from a record low of 0.1 percent at the end of 2021, when inflation started to creep higher as economies slowly emerged from lockdowns.
Further tightening occurred as global inflation soared after Russia’s invasion of Ukraine sent energy and food prices rocketing.
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