Bank of England holds rates as inflation pressures ease
The Bank of England kept its key interest rate at 3.7 per cent as inflation pressures on the British economy became more moderate after the US and Iran signed a deal to end their war.
Thursday’s decision was widely expected following figures showing inflation did not rise as expected in May and instead remained steady at 2.8 per cent.
Although this rate remained above the bank’s two percent target, it raised hopes that the upward pressure on prices created by the rise in oil and natural gas prices after the start of the Iran war on February 28 may be less than expected.
Economists think that interest rate setters will oppose an increase in interest rates in the coming months, but this will only be possible if the recent decline in energy prices continues.
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