Bank of England holds main UK interest rate at 4% with inflation above target

LONDON (AP) — The Bank of England has held its main interest rate at 4% as inflation in the U.K. remains almost double its target of 2%.

Thursday’s decision was widely anticipated.

On Wednesday, figures showed inflation in the U.K. held steady at 3.8% in the year to August.

Since it started cutting borrowing costs in August 2024 after the unwinding of the previous spike in inflation in the wake of Russia’s invasion of Ukraine, the bank has done so in a gradual manner every three months.

If the bank were to continue to cut interest rates in the manner it has been doing so, the next meeting in November would see a further reduction.

However, economists remain split as to whether another cut will be forthcoming since inflation has proven to be stickier than anticipated, partly because of relatively high wage increases.