Bank of England keeps key lending rate unchanged at 4%

UK annual inflation was 3.8 per cent in August. The bank today confirmed that it is set to peak at 4 per cent this month.

The central bank’s monetary policy committee voted by a majority of 7-2 to arrive at the decision, which came a day after the US Federal Reserve cut its benchmark borrowing costs for the first time this year.

“The committee remains focused on squeezing out any existing or emerging persistent inflationary pressures, to return inflation sustainably to its 2-per cent target in the medium term,” the bank said in a statement.

Twelve-month consumer price index-based inflation was 3.8 per cent in August, and is expected to increase slightly in September, before falling towards the 2-per cent target thereafter, the statement noted.

Norway's central bank too reduced interest rates today to 4 per cent, while the Bank of Canada also cut borrowing costs this week, citing concerns over the impact of US tariffs.

ALCHEMPro News Desk (DS)