LONDON (AP) — The Bank of England is widely expected to keep interest rates unchanged on Thursday, a day after official figures showed inflation in the U.K. holding steady at an annual rate of 2.2% in August, with higher airfares offset by lower fuel costs and restaurant and hotel bills.
Central banks around the world dramatically increased borrowing costs from near zero during the coronavirus pandemic when prices started to shoot up, first as a result of supply chain issues built up and then because of Russia’s full-scale invasion of Ukraine which pushed up energy costs. As inflation rates have fallen from multi-decade highs recently, they started cutting interest rates.
The latest reading from the Office of National Statistics on Wednesday was in line with market predictions and means that inflation remains just above the British central bank's goal of 2% for the second month running, having fallen in June to the target for the first time in nearly three years.
Last month, the central bank reduced its main interest rate by a quarter-point to 5%, the first cut since the onset of the pandemic. It was a close call though with four of the nine members voting for no change.
Later Wednesday, the U.S. Federal Reserve is expected to cut rates for the first time in four years.
Most economists think the Bank of England's monetary policy committee will take a pause on Thursday as some panel members have voiced ongoing worries about price rises in the crucial services sector, which accounts for around 80% of the British economy. Wednesday's data showed that services sector inflation jumped to 5.6% in August from 5.2% in July as a result of higher airfares across European routes.
However, they think that the bank will most likely cut again in November, in the wake of the government's budget on Oct. 30.
The new Labour government has said that it needs to plug a 22 billion-pound ($29 billion) hole in the public finances and has indicated that it may have to raise taxes and lower spending, which would likely weigh on the near-term outlook for the British economy and put downward pressure on inflation.
“An interest rate cut on Thursday is looking unlikely with the majority of the Monetary Policy Committee likely to want to assess the impact of next month’s budget before deciding when to loosen policy again,” said Suren Thiru, economics director at the Institute of Chartered Accountants in England and Wales.
FILE - The Bank of England is pictured in London, on Aug. 1, 2024. (AP Photo/Alberto Pezzali, File)
NASHVILLE, Tenn. (AP) — Sam Surridge scored a goal in the 19th minute, Joe Willis had three saves the Nashville SC beat the Chicago Fire 1-0 Wednesday night.
Surridge played a header, off an arcing entry from Hany Mukhtar, that went high above the crossbar before dropping inside the post to give Nashville a 1-0 lead.
Nashville (8-13-8) has won back-to-back games following an eight-game losing streak.
The Fire had 58% possession and outshot Nashville 10-5.
Chicago (7-15-8), which beat the New York Red Bulls 2-1 last time out, has lost four of its last six games.
AP MLS: https://apnews.com/hub/major-league-soccer
Nashville SC goalkeeper Joe Willis defends the goal during the first half of an MLS soccer match against the Chicago Fire, Wednesday, Sept. 18, 2024, in Nashville, Tenn. (AP Photo/George Walker IV)
Nashville SC forward Teal Bunbury, left, and Chicago Fire defender Ariel Lassiter, right, battle for the ball during the first half of an MLS soccer match Wednesday, Sept. 18, 2024, in Nashville, Tenn. (AP Photo/George Walker IV)
Nashville SC goalkeeper Joe Willis, front, punches the ball away from Chicago Fire forward Tom Barlow, right, during the first half of an MLS soccer match Wednesday, Sept. 18, 2024, in Nashville, Tenn. (AP Photo/George Walker IV)
Chicago Fire forward Tom Barlow, center, heads the ball past Nashville SC defender Daniel Lovitz, left, and Nashville SC defender Jack Maher, right, during the first half of an MLS soccer match Wednesday, Sept. 18, 2024, in Nashville, Tenn. (AP Photo/George Walker IV)
Nashville SC forward Sam Surridge, right, gathers the ball in front of Chicago Fire defender Tobias Salquist, left, during the first half of an MLS soccer match Wednesday, Sept. 18, 2024, in Nashville, Tenn. (AP Photo/George Walker IV)
Nashville SC forward Sam Surridge (9) celebrates a goal during the first half of an MLS soccer match against the Chicago Fire, Wednesday, Sept. 18, 2024, in Nashville, Tenn. (AP Photo/George Walker IV)
Nashville SC midfielder Anibal Godoy (20) grabs Chicago Fire midfielder Maren Haile-Selassie, left, as they chase the ball during the first half of an MLS soccer match Wednesday, Sept. 18, 2024, in Nashville, Tenn. (AP Photo/George Walker IV)
Chicago Fire midfielder Maren Haile-Selassie, right, blocks a kick by Nashville SC defender Daniel Lovitz, left, during the first half of an MLS soccer match Wednesday, Sept. 18, 2024, in Nashville, Tenn. (AP Photo/George Walker IV)
Chicago Fire midfielder Fabian Herbers, right, kicks the ball past Nashville SC defender Jack Maher, left, during the first half of an MLS soccer match Wednesday, Sept. 18, 2024, in Nashville, Tenn. (AP Photo/George Walker IV)
Nashville SC forward Sam Surridge (9) celebrates a goal with defender Daniel Lovitz, left, and forward Teal Bunbury (12) during the first half of an MLS soccer match against the Chicago Fire, Wednesday, Sept. 18, 2024, in Nashville, Tenn. (AP Photo/George Walker IV)
