Bank of England Holds Rates Steady at 4% Amid Ongoing Inflation Concerns

UK Interest Rates Held at 4% as Bank Warns of Continued Inflation Pressures LONDON (AP) - The Bank of England kept interest rates steady at 4% on Thursday, but Governor Andrew Bailey warned that the UK is "not out of the woods yet" when it comes to inflation. The decision was widely expected by analysts, who had not anticipated a cut given the recent surge in prices. Inflation has been rising at nearly twice the Bank's target rate of 2%, driven in part by higher food costs and other factors. Bailey acknowledged that the Bank is "cautious" about when it will trim borrowing costs again, but said it expects inflation to return to its target within a reasonable timeframe. Two members of the Bank's Monetary Policy Committee (MPC) voted for a cut to 3.75%, but were outvoted. The Bank also announced that it would reduce the amount of government debt it holds at a slower pace, following weeks of turmoil in financial markets. This move is seen as a sign of increased caution by the Bank, which has been cutting interest rates five times since August last year to ease inflationary pressures. Inflation has been a persistent concern for policymakers around the world, with many countries struggling to balance economic growth with price stability. The UK's experience is not unique, and Bailey noted that "many other countries are facing similar challenges." The Bank will meet again in two weeks' time to discuss interest rates, and any further cuts would depend on developments in the economy. In the meantime, consumers and businesses will have to continue navigating a complex economic landscape. Background: The UK's inflation rate has been rising steadily since April, driven by higher food costs and other factors. This has led to increased pressure on policymakers to take action to control prices. Perspective: "The Bank is taking a cautious approach, but it's clear that inflation remains a major concern," said David Blanchflower, a former MPC member. "It's not just the UK - many countries are facing similar challenges, and it will be interesting to see how they respond." Current Status: The Bank of England has kept interest rates steady at 4%, but warned that the UK is "not out of the woods yet" when it comes to inflation. The next meeting of the MPC will take place in two weeks' time. Next Developments: The Bank's decision on interest rates will be closely watched by markets and policymakers around the world, as they seek to balance economic growth with price stability. *Reporting by Bbc.*