Bank of England keeps key rate at 3.75% for the fifth time this year
Summary
The Bank of England kept its key interest rate at 3.75% for the fifth time this year after inflation in the UK dropped more than expected. The rate decision reflects concerns about ongoing inflation and recent conflicts in the Middle East affecting oil prices and the economy.Key Facts
- The Bank of England’s monetary policy committee voted 6-3 to keep the interest rate at 3.75%.
- The rate has been at 3.75% since December after four rate cuts expected in 2025.
- UK inflation fell to 2.6% in June from 2.8% in May, above the bank’s target of 2% for 21 months straight.
- Fighting between the US and Iran caused oil prices to rise sharply, raising economic concerns.
- Brent crude oil prices jumped over $100 a barrel in late July but later dropped to about $92.
- The US Federal Reserve also kept its interest rate steady at 3.5%-3.75%, signaling caution on inflation.
- UK economists are watching new Prime Minister Andy Burnham’s policies on taxes and spending that might affect inflation and growth.
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