Bank of England holds rates as inflation and growth pose policy dilemma

[https://invezz.com/wp-content/uploads/2024/07/97562841_l_normal_none-scaled.jpg] The Bank of England voted on Thursday to keep interest rates steady at 4%, balancing sticky inflation pressures with a weak economic backdrop. The Monetary Policy Committee (MPC) opted by a 7-2 vote split to hold its benchmark rate unchanged, marking a pause after August’s 25 basis point reduction. While the decision was widely expected, markets were closely watching the vote and the central bank’s guidance for signals ahead of its November meeting. The announcement comes a day after fresh data showed UK inflation held firm at 3.8% in August, unchanged from July. Core inflation edged slightly lower to 3.6%, while services inflation cooled to 4.7% from 5% a month earlier. Policymakers expect inflation to reach 4% in September before easing gradually toward the 2% target by early 2026. But the combination of stagnant growth and persistent price pressures has left the central bank wary of moving too quickly on further cuts. GROWTH STAGNATES AND THE JOB MARKET COOLS The latest growth figures showed the economy flatlining in July, fueling concerns that a slowdown is taking hold. At the…