Bank of England set to defy Fed’s rate-hike lead, despite rising inflation

Live updates

1. 2h ago

   Bank of England Defies Fed Lead With Rate Hold Amid Inflation

   The Bank of England is expected to keep interest rates unchanged at 3.75 percent while holding steady against the US Federal Reserve's rate-hike lead of 4 percent, despite rising inflation pressures. Officials face tough choices amid an energy shock and an Iran war spiking inflation, alongside a slowing bond-buying programme. While the Federal Reserve moves forward with aggressive hikes, the British central bank is holding its course, though mounting economic pressures continue to stir discussion over a potential future rate increase.

   Why it matters

   This divergence highlights contrasting central bank strategies in response to global energy shocks and geopolitical conflicts like the Iran war. The pressure on the Bank of England to raise rates mounts as UK rents accelerate and the average London house price falls 19,000 pounds below its peak. Observers watch how these diverging paths between the US and UK monetary policies will impact inflation management and currency stability.

   What is confirmed

   • The Bank of England holds rates at 3.75 percent while the US Federal Reserve hikes to 4 percent.
   • The Bank of England is expected to slow its bond-buying programme.
   • Rising inflation and an energy shock are putting the Bank of England under pressure.

   Still unconfirmed

   • An Iran war is spiking inflation and driving the divergence between the Bank of England and the Fed.
   • The average London house price has fallen 19,000 pounds below its peak while UK rents accelerate.

   What to watch next

   • Official announcement of the Bank of England interest rate decision and bond-buying pace
   • Future policy statements regarding whether the Bank of England will follow the Fed's rate-hike lead
   Sources used for this update (10)

   1. The Guardian — UK rents accelerate, as average London house price falls £19,000 below peak – business live
   2. cnbc.com — Bank of England set to defy Fed’s rate-hike lead, despite rising inflation
   3. The Guardian — Bank of England expected to slow bond-buying programme and hold interest rates today – business live
   4. BBC — Interest rates hold expected but Bank of England facing tough choices
   5. Bloomberg.com — BOE Set to Hold Rates With Warning on Inflation: Decision Guide
   6. oilprice.com — Energy Shock Puts Bank of England Under Pressure to Raise Rates
   7. Barron's — BOE and Fed Diverge on Rates as Iran War Spikes Inflation
   8. reuters.com — Bank of England to hold rates but energy shock stirs talk of a hike
   9. U.S. News & World Report — Bank of England Expected to Keep Interest Rates Unchanged Despite Rising Inflation
   10. finance.yahoo.com — Why Is the BoE Holding Rates While the US Fed Hikes?
   confidence 90%