UK Keeps Policy Rate at 3.75% for Sixth Straight Meeting, Leaves Door Open to Hike

[Financial News] With the United States raising its policy rate for the first time in three years and two months, the United Kingdom chose to keep its rate unchanged. However, it left open the possibility of a future hike.
According to local media, including the Financial Times (FT), the Bank of England (BOE) held a Monetary Policy Committee meeting on the 17th (local time) and kept its policy rate at an annual 3.75%. After cutting the rate by 0.25 percentage points in December last year, the BOE has held it unchanged for six consecutive meetings this year.
Six of the nine members of the BOE's Monetary Policy Committee voted to keep the rate at 3.75%, while three called for a 0.25-percentage-point increase to 4%.
Andrew Bailey, governor of the BOE, said after the rate decision, "The impact that the rise in global energy costs has had on UK inflation and wage-setting decisions so far has been limited." He added, "The longer the volatility persists, the greater its impact on inflation will be, and the greater the likelihood that we will need to raise the policy rate to return inflation to our 2% target."
The U.S. Federal Reserve System (Fed), which had previously kept its policy rate unchanged for five consecutive meetings this year, announced on the 16th that it would raise the rate by 0.25 percentage points and set it within a range of 3.75% to 4%. Meanwhile, the European Central Bank (ECB), which serves the Eurozone (the 21 countries that use the euro), announced on the 10th that it had raised its three key policy rates by 0.25 percentage points each.


[email protected] Park Jong-won Reporter