The Bank of England will leave inflation unchanged at an eight-month high.
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The Bank of England kept interest rates at 4.75% as UK inflation rose to an eight-month high. Higher transport and housing costs have contributed significantly to UK inflation.
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The Bank of England (BoE) has decided to keep the interest rate cut as the UK's inflation reached its highest level in eight months.
UK inflation rises in November 2024 The consumer price index (CPI) rose to 2.6 percent in November, up from 2.3 percent in October, and for the second month in a row it beat the central bank's 2 percent rate.
The UK's headline inflation, which includes the Consumer Price Index (CPI), rose to 3.5 per cent in October from 3.2 per cent in November.
Prices of goods and services in the UK are rising faster than in October. This increase stems from factors such as higher transportation costs and rising housing costs. While overall inflation is rising, the rate of increase has slowed compared to previous months.
Although recent inflation has not been above market expectations, inflation in the services sector is a continuing concern of the central bank, although some inflation is indeed easing.
The services sector, which accounts for 80 percent of the UK economy, has seen stubbornly high inflation, prompting the central bank to adopt a cautious approach.
Economists ruled out a fall from the current 4.75% as UK inflation data came out.
The BOE's decision comes as the US Fed cut interest rates by 25 basis points, in line with market expectations. The Bank of Japan also kept interest rates unchanged on Thursday.
While the US central bank's decision was in line with forecasts, the Fed's message was surprisingly more hawkish.
Fed Chairman Jerome Powell indicated that the rate of future rate cuts will be slow as inflation remains above the target of 2%. In 2025, the number of interest rate cuts may be limited to two instead of four, closely monitor economic conditions.
Global markets took a hit following the Fed's hawkish signal.
US stocks suffered their biggest daily decline in months, with major indexes posting heavy losses. European shares also fell, reflecting broader selling in response to the Fed's stance.
Risky assets, including crypto assets such as Bitcoin, faced downward pressure as market sentiment turned cautious. Bitcoin was down roughly 6%, trading below $100,000 on Wednesday evening before recovering to over $102,000 at press time, according to TradingView.
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