Bank of England, December 2024.
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LONDON — The Bank of England concluded its final meeting of the year on Thursday by keeping interest rates on hold after British inflation rose to an eight-month high.
Analysts generally expect to keep interest rates on hold at the December meeting as policymakers remain concerned about stubborn services sector inflation and wage growth.
This year the Bank of England has raised the key interest rate from 5.25% to 4.75%, a range of two percentage points.
Contrary to expectations, three members of the Monetary Policy Committee voted for a rate cut, while six members favored leaving it unchanged. Economists polled by Reuters had previously predicted that only one member would vote for a rate cut.
GBP/USD gains fell immediately after the Bank of England’s announcement, rising 0.25% at 12:06 p.m. The U.S. dollar gained broadly on Wednesday after the Federal Reserve cut interest rates by 25 basis points but signaled a more hawkish outlook for 2025. It gave up some of its gains on Thursday morning. .
GBP/USD.
The central bank said in a statement that Britain’s overall inflation rate rose to 2.6% in November, slightly higher than previously expected, adding that service sector inflation remained “high.”
Money markets this week scaled back bets on the pace of further interest rate cuts next year following the release of inflation and summer wage growth data, now predicting a rate cut of about 50 basis points, down from expectations of about 70 basis points. .
This is a breaking news story and will be updated soon.
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