Bank of England Holds Interest Rate at 4% Amid Ongoing Inflation Fears

UK Interest Rates Held at 4% as Bank Warns of Continued Inflation Concerns LONDON (AP) - The Bank of England's Monetary Policy Committee (MPC) decided to maintain the benchmark interest rate at 4%, despite rising inflation concerns, in a move that reflects the central bank's cautious approach to monetary policy. The decision was widely expected by analysts, who had anticipated that the MPC would hold off on cutting rates given the recent surge in inflation. The Bank of England governor, Andrew Bailey, warned that "we're not out of the woods yet" when it comes to rising prices, emphasizing the need for continued vigilance. Inflation has been a pressing concern globally, with many countries struggling to contain price increases. The UK's inflation rate is currently at 9.1%, nearly twice the Bank's target rate of 2%. Bailey acknowledged that the MPC would continue to monitor the situation closely and take action as necessary. The decision to hold rates steady was not unanimous, however. Two members of the MPC voted in favor of a cut to 3.75%, citing concerns about the impact on economic growth. The Bank's decision to maintain rates at 4% is likely to be seen as a cautious approach, given the uncertainty surrounding inflation. The UK's experience with inflation is not unique. Many countries have been grappling with rising prices, including the United States, where inflation has reached a 40-year high. The European Central Bank has also been keeping a close eye on inflation, which has been driven by supply chain disruptions and commodity price increases. Bailey emphasized that the MPC would continue to prioritize its inflation target of 2%, but acknowledged that achieving this goal may take time. "We're not out of the woods yet," he said. "But we're working hard to get there." The Bank's decision to hold rates steady is likely to have implications for consumers and businesses alike. With interest rates remaining at 4%, borrowing costs will remain high, which could impact economic growth. The MPC will meet again in August and November to discuss interest rates, providing further insight into the central bank's thinking on monetary policy. In the meantime, Bailey's warning that "we're not out of the woods yet" serves as a reminder that inflation remains a pressing concern globally. By holding rates steady, the Bank of England is signaling its commitment to maintaining price stability, even if it means tolerating higher borrowing costs in the short term. As Bailey noted, "the MPC will continue to monitor the situation closely and take action as necessary." *Reporting by Bbc.*