Bank of England leaves interest rates on hold

(Sharecast News) - The Bank of England left the cost of borrowing unchanged on Thursday, as widely expected, on the back of persistent inflation. The rate-setting Monetary Policy Committee voted by a majority of seven-to-two to leave interest rates at 4%.

Swati Dhingra and Alan Taylor both voted to cut by 25 basis points.

The MPC has reduced rates three times this year, including a 25bps trim in August. But it continues to juggle conflicting economic headwinds.

Growth is sluggish at best, with GDP slowing to 0.2% in three months to July, from 0.3% in the second quarter. There are also signs of a weakening jobs market.

But at 3.8% inflation remains well above the central bank's long-term target of 2%.

On Wednesday, the Federal Reserve cut rates by a quarter point, its first reduction this year, and signalled more to come.

It said the softening labour market was more of a concern that a potential rise in inflation on the back of Donald Trump's tariff regime.

The Fed has come under growing pressure from Trump in recent months to lower the cost of borrowing.