Bank of England maintains interest rates amid rising UK inflation

Investing.com -- The Bank of England (BOE) concluded its final meeting of the year on Thursday, deciding to keep interest rates steady, following an eight-month high in U.K. inflation. The decision was in line with economists' expectations, who had anticipated a rate hold at the December meeting due to concerns over persistent services inflation and wage growth.

Earlier this year, the BOE had reduced its key rate from 5.25% to 4.75% in two quarter-percentage-point moves. However, this week, money markets have scaled back expectations for the speed of additional cuts in the coming year. This change of outlook was prompted by the recent release of data on November inflation and summer wage growth. Market participants are now predicting approximately 50 basis points of future cuts, a reduction from the previous forecast of around 70 basis points' worth of cuts on Monday.

The BOE's latest decision comes in the wake of the U.S. Federal Reserve's move to cut interest rates by a quarter point on Wednesday. Although the rate reduction was anticipated, traders were taken aback by the central bank's suggestion that it would likely only decrease rates twice more in 2025.

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Source: Investing.com