“Bank of England maintains 15-year high interest rates amidst economic concerns”

LONDON (AP) — The Bank of England has decided to keep borrowing rates unchanged, despite concerns about the state of the British economy. Unlike the U.S. Federal Reserve, the Bank of England has shown no indication of considering a rate cut in the near future.

The central bank has maintained its main interest rate at 5.25%, which is a 15-year high. This rate has been unchanged since August, following a two-year period of rate hikes. The Monetary Policy Committee voted to keep rates on hold, with six members in favor and three members calling for a quarter-point hike.

While the rate increases have helped to combat inflation, the impact of higher mortgage rates on consumer spending has weighed down economic growth in the UK.

On Wednesday, the U.S. Federal Reserve also decided to keep rates on hold. The European Central Bank, which sets policy for the 20 EU countries that use the euro currency, is expected to do the same on Thursday.

The Fed has signaled that it plans to make three interest rate cuts next year, while market expectations also anticipate cuts by the ECB.

However, the Bank of England’s rate cut seems unlikely at this point.

In its statement, the bank mentioned that monetary policy would need to remain restrictive for a sufficient period to sustainably return inflation to the 2% target in the medium term.

The decision to maintain the high interest rate comes after two years of rate hikes aimed at addressing inflation caused by supply chain issues during the pandemic and Russia’s invasion of Ukraine, which led to increased food and energy costs.

The Bank of England has succeeded in bringing down inflation from a four-decade high of over 11%, but there is still progress to be made in reaching the 2% target.

In October, inflation, as measured by the consumer price index, stood at 4.6%, which is still considered too high.