Bank of England keeps interest rate unchanged at 5.25% a day after US Fed Reserve holds rates steady

Elsewhere on the global stage, Brazil's central bank took a different path, cutting its key interest rate by half a percentage point with further reductions anticipated into 2024. The move aligns with easing inflation and improving prospects in the global economic landscape.

Meanwhile, Norway's central bank surprised observers by raising its benchmark interest rate by 25 basis points to 4.50%, as it endeavors to combat persistent inflation. The bank indicated that it is likely to maintain this level until late 2024.

In Switzerland, the National Bank signaled the end of its tightening cycle, keeping borrowing costs steady after inflation slowed. With prices rising below the 2% ceiling set by the central bank, the Swiss National Bank left its key interest rate at 1.75% for a second consecutive meeting, reflecting a cautious approach to monetary policy in light of economic conditions.

Six of the nine members of the Bank of England's Monetary Policy Committee voted to keep rates on hold while three wanted a quarter-point hike — a clear signal to the markets that rate cuts are not on the agenda yet. That was backed up by bank Gov. Andrew Bailey, who said in a statement that interest rate policy would likely have to remain “restrictive for an extended period of time."

The Bank of England has managed to get inflation down from a four-decade high of over 11% — but there’s still a way to go for it to get back to the bank's 2% target. Inflation, as measured by the consumer price index, stood at 4.6% in the year to October, clearly still too high for comfort. “We’ve come a long way this year .... but there is still some way to go," Bailey said.

The bank's decision to hold rates follows two years of hikes that targeted a surge in inflation, first stoked by supply chain issues during the coronavirus pandemic and then Russia’s invasion of Ukraine, which pushed up food and energy costs.