Divided Bank of England holds key interest rate at 4% despite hopes inflation has peaked

Core Viewpoint - The Bank of England has maintained its main interest rate at 4% as inflation remains significantly above the target, with a critical budget announcement expected from the U.K. government [1][2] Group 1: Interest Rate Decision - The decision to keep rates unchanged was anticipated, although some economists expected a potential cut of 0.25% [1] - The vote was narrowly decided, with five members voting to maintain rates and four in favor of a cut [2] Group 2: Inflation Context - The annual consumer price inflation rate is currently at 3.8%, nearly double the Bank's target of 2% [2] - Inflation is expected to decrease in the coming months, potentially reaching the target next year [3] Group 3: Economic Outlook - The Monetary Policy Committee is uncertain about the economic landscape ahead of the budget announcement on November 26 [3] - Treasury chief Rachel Reeves has indicated that tax increases may be necessary in the upcoming budget, which could negatively impact the economy and prices [3]