The Bank of England is expected to keep its main interest rate unchanged at 3.75% on Thursday for a sixth consecutive meeting, even as U.K. inflation climbed to a five-month high of 3.1% in August from 2.9% the month before. Economists expect a majority of the nine-member Monetary Policy Committee to hold off until there is more evidence that higher inflation is feeding into underlying prices and wages, with David Rees, head of global economics at Schroders, saying a relatively soft backdrop in wages and the labor market should limit how far imported price pressures become embedded domestically. Official figures released Wednesday showed rising pump prices and airfares were largely behind the increase, which pushed inflation further above the Bank of England's 2% target. Many economists forecast higher inflation in the coming months as households face another rise in domestic energy bills from October, and the consensus in financial markets is that rates will be raised at one of the next two meetings, in November or December. U.K. rates had been trending down from a 15-year high of 5.25% until the U.S. and Israel attacked Iran in late February, a war that drove sharp increases in oil and gas prices partly because the Strait of Hormuz has been largely closed to traffic since.
Schroders PLCSchroders economist David Rees quoted on wage backdrop limiting inflation pass-through, no company-specific impact
Bank of Chongqing Co Ltd