The Bank of England (BOE) yesterday maintained its key interest rate in 4.0%, since the high inflation in the United Kingdom compensates for the stagnant economic growth of the country.
“Although we estimate that inflation will return to our 2.0%goal, we are not yet out of danger, so any future cut should be carried out gradually and carefully,” said Andrew Bailey, governor of the BOE, in a statement.
Wednesday’s official data showed that annual inflation stood at 3.8% in August. The BOE reported yesterday that it foresees a 4.0% price increase for this month.
Linsday James, investment strategist of the Quilter patrimonial management firm, mentioned that the markets “are not completely deducting the next rate cut until the end of April.”
Political leaders must balance the increase in inflation with the slowness of the British economy and unemployment, which is at its highest level in four years.
Despite several reductions during the past year, the British economy has had difficulty growing after the Minister of Finance, Rachel Reeves, increased taxes and cut public spending after the victory of the Labor Party in the July elections.
