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The Bank of England pictured in December 2024. Sopa Images | Lightrocket | Getty Images LONDON — The Bank of England on Thursday ended its last meeting of the year with a decision to leave interest rates unchanged, after U.K. inflation rose to an eight-month high. Analysts had widely expected a rate hold at the December meeting, as policymakers remain concerned with stubborn services inflation and wage growth. The BOE has already taken its key rate from 5.25% to 4.75% this year in two quarter-percentage-point moves. In a deviation from expectations, three members of the Monetary Policy Committee voted to reduce rates, while six were in favor of a hold. Economists polled by Reuters had forecast only one member would vote to cut. Sterling pared gains against the U.S. dollar directly following the BOE announcement, trading 0.2% higher at 12:22 p.m. The greenback staged a broad rally on Wednesday after the U.S. Federal Reserve cut interest rates by a quarter point but signaled a more hawkish outlook for 2025. It gave up some gains on Thursday morning. Stock Chart IconStock chart icon GBP/USD. In a statement, the BOE said the increase in U.K. headline inflation in November to 2.6% was slightly higher than previously expected, adding that services inflation remained “elevated.” BOE staff also downgraded their economic forecast for the fourth quarter of 2024, now predicting no growth, compared with the 0.3% expansion predicted in its November report. U.K. growth figures have come in weaker than expected in recent months, with the economy posting a surprise 0.1% contraction in October. Money markets this week pared back bets on the pace of further trims next year after the publication of data on inflation and summer wage growth, and are now pricing in roughly 50 basis points of upcoming cuts, down from…

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Filed under: News - @ December 19, 2024 12:26 pm