LONDON (AP) — The U.K.’s central bank has kept interest rates on hold as inflation moves further above its target rate, even though the British economy is flatlining at best.
The Bank of England’s nine-member Monetary Policy Committee kept its main interest rate unchanged at 4.75% Thursday with new data showing inflation rising to 2.6%, further above the bank's 2% target.
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Christmas shoppers pass a sign in a shop window 'Choose Love' in central London, Friday, Dec. 13, 2024, Britain's economy unexpectedly shrank by 0.1 percent in October, The Office for National Statistics stated in figures released Friday. (AP Photo/Alberto Pezzali)
Christmas shoppers in central London, Friday, Dec. 13, 2024, Britain's economy unexpectedly shrank by 0.1 percent in October, The Office for National Statistics stated in figures released Friday. (AP Photo/Alberto Pezzali)
Christmas shoppers out wearing seasonal hats in central London, Friday, Dec. 13, 2024, Britain's economy unexpectedly shrank by 0.1 percent in October, The Office for National Statistics stated in figures released Friday. (AP Photo/Alberto Pezzali, Pool)
Christmas shoppers in central London, Friday, Dec. 13, 2024, Britain's economy unexpectedly shrank by 0.1 percent in October, The Office for National Statistics stated in figures released Friday. (AP Photo/Alberto Pezzali)
FILE - The Bank of England is pictured in London, on Aug. 1, 2024. (AP Photo/Alberto Pezzali, File)
In response the rate-setting panel, which last cut its key rate in November, is taking a cautious stance because lower borrowing costs could potentially stoke inflation even further.
That’s a disappointment for many struggling sectors in the U.K. economy that would be helped by cheaper credit in an environment of paltry growth. The British economy has now contracted for two months in a row.
“Persistent price pressures will prevent the Bank of England from responding to flat output and falling employment by cutting interest rates,” said Andrew Wishart, an economist at Berenberg Bank.
Few economists think interest rates will drop dramatically in 2025 either. It's a similar picture in the U.S., where the Federal Reserve reined in expectations Wednesday of reductions next year after its latest rate cut.
Critics argue that the new Labour government’s first budget in October has both elevated inflation pressures while also damping down on growth. A big increase in business taxes may see firms try to offset the additional costs by raising prices or cutting down on hiring. The government argues that it needed to raise taxes to shore up public finances and inject money into cash-starved public services.
Still, inflation in the U.K. and across the world is far lower than it was a couple of years ago, partly because central banks 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 and then because of Russia’s full-scale invasion of Ukraine which pushed up energy costs.
As inflation rates have fallen from multidecade highs, the central banks have started cutting interest rates, though few, if any, economists think that rates will fall back to the super-low levels that persisted in the years after the global financial crisis of 2008-2009.
Christmas shoppers pass a sign in a shop window 'Choose Love' in central London, Friday, Dec. 13, 2024, Britain's economy unexpectedly shrank by 0.1 percent in October, The Office for National Statistics stated in figures released Friday. (AP Photo/Alberto Pezzali)
Christmas shoppers in central London, Friday, Dec. 13, 2024, Britain's economy unexpectedly shrank by 0.1 percent in October, The Office for National Statistics stated in figures released Friday. (AP Photo/Alberto Pezzali)
Christmas shoppers out wearing seasonal hats in central London, Friday, Dec. 13, 2024, Britain's economy unexpectedly shrank by 0.1 percent in October, The Office for National Statistics stated in figures released Friday. (AP Photo/Alberto Pezzali, Pool)
Christmas shoppers in central London, Friday, Dec. 13, 2024, Britain's economy unexpectedly shrank by 0.1 percent in October, The Office for National Statistics stated in figures released Friday. (AP Photo/Alberto Pezzali)
FILE - The Bank of England is pictured in London, on Aug. 1, 2024. (AP Photo/Alberto Pezzali, File)
MANILA, Philippines (AP) — Former Philippine President Rodrigo Duterte was arrested at Manila's international airport Tuesday on order of the International Criminal Court in connection with a case of crime against humanity filed against him, the Philippine government said.
Duterte was arrested after arriving from Hong Kong and police took him into custody on orders of the ICC, which has been investigating the mass killings that happened under the former president's deadly crackdown against illegal drugs, President Ferdinand Marcos' office said in a statement.
“Upon his arrival, the prosecutor general served the ICC notification for an arrest warrant to the former president for the crime of crime against humanity,” the government said. “He’s now in the custody of authorities."
The surprise arrest sparked a commotion at the airport, where lawyers and aides of Duterte loudly protested that they, along with a doctor and lawyers, were prevented from coming close to him after he was taken into police custody. “This is a violation of his constitutional right,” Sen. Bong Go, a close Duterte ally. told reporters.
Duterte's arrest and downfall stunned and drove families of the victims of his bloody crackdowns against illegal drugs to tears.
“This is a big, long-awaited day for justice,” Randy delos Santos, the uncle of a teenager killed by police during an anti-drug operation in August 2017 in the Manila metropolis, told The Associated Press.
“Now we feel that justice is rolling. We hope that top police officials and the hundreds of police officers who were involved in the illegal killings should also be placed in custody and punished,” delos Santos said.
Three of the police officers who killed his nephew, Kian delos Santos, were convicted in 2018 for the high-profile murder, which prompted to Duterte at the time to temporarily suspend his brutal anti-drugs crackdown.
The conviction was one of at least three, so far, against law enforcers involved in the anti-drugs campaign, reflecting the concerns of families of victims of suspected extrajudicial killings that they would not get justice in the Philippines, hence, their decision to seek the help of the ICC.
It was not immediately clear where Duterte was taken by the police. The government said the 79-year-old former leader was in good health.
The ICC began investigating drug killings under Duterte from Nov. 1, 2011, when he was still mayor of the southern city of Davao, to March 16, 2019, as possible crimes against humanity. Duterte withdrew the Philippines in 2019 from the Rome Statute in a move human rights activists say was aimed at escaping accountability.
The Duterte administration moved to suspend the global court’s investigation in late 2021 by arguing that Philippine authorities were already looking into the same allegations, arguing the ICC — a court of last resort — didn’t have jurisdiction.
Appeals judges at the ICC ruled in 2023 the investigation could resume and rejected the Duterte administration’s objections. Based in The Hague, the Netherlands, the ICC can step in when countries are unwilling or unable to prosecute suspects in the most heinous international crimes, including genocide, war crimes and crimes against humanity.
President Ferdinand Marcos Jr., who succeeded Duterte in 2022 and became entangled in a bitter political dispute with the former president, has decided not to rejoin the global court. But the Marcos administration has said it would cooperate if the ICC asks international police to take Duterte into custody through a so-called Red Notice, a request for law enforcement agencies worldwide to locate and temporarily arrest a crime suspect.
Former President of the Philippines Rodrigo Duterte arrives inside the Southorn Stadium during a thanksgiving gathering organized by Hong Kong-based Filipino workers for the former populist president in Hong Kong on Sunday, March 9, 2025. (AP Photo/Vernon Yuen)
Media waits outside Villamor Air Base after former President Rodrigo Duterte was arrested, Tuesday, March 11, 2025, near Manila, Philippines. (AP Photo/Aaron Favila)
Security officials stand at Villamor Air Base after former President Rodrigo Duterte was arrested, Tuesday, March 11, 2025, near Manila, Philippines. (AP Photo/Aaron Favila)
FILE - Former Philippine President Rodrigo Duterte gestures as he answers questions during a joint committee hearing of the House of Representatives investigating the war on drugs during his administration in Quezon City, Philippines on Nov. 13, 2024. (AP Photo/Aaron Favila, File)
FILE- Lawyer Jude Sabio from the Philippines stands for a photo as he holds a 77-page file outside the International Criminal Court asking to investigate his country's president Rodrigo Duterte for crimes against humanity, in The Hague, Netherlands, Monday, April 24, 2017. (AP Photo/Mike Corder, File)
Supporters rally outside Villamor Air Base after former President Rodrigo Duterte was arrested, Tuesday, March 11, 2025, near Manila, Philippines. (AP Photo/Aaron Favila)
Former President of the Philippines Rodrigo Duterte speaks inside the Southorn Stadium during a thanksgiving gathering organized by Hong Kong-based Filipino workers for the former populist president in Hong Kong on Sunday, March 9, 2025. (AP Photo/Vernon Yuen)
Former President of the Philippines Rodrigo Duterte arrives inside the Southorn Stadium during a thanksgiving gathering organized by Hong Kong-based Filipino workers for the former populist president in Hong Kong on Sunday, March 9, 2025. (AP Photo/Vernon Yuen)
Supporters of former populist President of the Philippines Rodrigo Duterte cheer during a thanksgiving gathering organized by Hong Kong-based Filipino workers for him in Hong Kong on Sunday, March 9, 2025. (AP Photo/Vernon Yuen)
Supporters of former populist President of the Philippines Rodrigo Duterte waits for his arrival at a thanksgiving gathering organized by Hong Kong-based Filipino workers as Filipino actor, Robin Padilla arrives in a car in Hong Kong on Sunday, March 9, 2025. (AP Photo/Vernon Yuen)
Supporters of former populist President of the Philippines Rodrigo Duterte waits for his arrival at a thanksgiving gathering organized by Hong Kong-based Filipino workers in Hong Kong on Sunday, March 9, 2025. (AP Photo/Vernon Yuen)
Supporters of former populist President of the Philippines Rodrigo Duterte waits for his arrival at a thanksgiving gathering organized by Hong Kong-based Filipino workers in Hong Kong on Sunday, March 9, 2025. (AP Photo/Vernon Yuen)
A supporter of former President Rodrigo Duterte reacts upon finding out he was arrested, at the airport in Manila, Philippines, Tuesday, March 11, 2025. (AP Photo/Aaron Favila)
Security officers patrol the airport after former President Rodrigo Duterte was arrested, in Manila, Philippines, Tuesday, March 11, 2025. (AP Photo/Aaron Favila)
Supporters of former populist President of the Philippines Rodrigo Duterte cheer during a thanksgiving gathering organized by Hong Kong-based Filipino workers for him in Hong Kong on Sunday, March 9, 2025. (AP Photo/Vernon Yuen)
Former President of the Philippines Rodrigo Duterte speaks inside the Southorn Stadium during a thanksgiving gathering organized by Hong Kong-based Filipino workers for the former populist president in Hong Kong on Sunday, March 9, 2025. (AP Photo/Vernon Yuen)
Supporters of former populist President of the Philippines Rodrigo Duterte waits for his arrival at a thanksgiving gathering organized by Hong Kong-based Filipino workers in Hong Kong on Sunday, March 9, 2025. (AP Photo/Vernon Yuen)
A supporter of former President Rodrigo Duterte reacts upon finding out he was arrested, at the airport in Manila, Philippines, Tuesday, March 11, 2025. (AP Photo/Aaron Favila)
Security officers patrol the airport after former President Rodrigo Duterte was arrested, in Manila, Philippines, Tuesday, March 11, 2025. (AP Photo/Aaron Favila)
Security officers patrol the airport after former President Rodrigo Duterte was arrested, in Manila, Philippines, Tuesday, March 11, 2025. (AP Photo/Aaron Favila)
FILE - Former President of the Philippines Rodrigo Duterte speaks inside the Southorn Stadium during a thanksgiving gathering organized by Hong Kong-based Filipino workers for the former populist president in Hong Kong on March 9, 2025. (AP Photo/Vernon Yuen, File)
