Bank of England holds rates but vote split surprises markets

The Bank of England decided to keep interest rates unchanged at its last meeting of the year, citing concerns about stubborn services inflation and wage growth, despite U.K. inflation reaching an eight-month high. While three members of the Monetary Policy Committee voted to reduce rates, six opted for a hold, surprising economists who had predicted only one member to vote for a cut. Sterling initially rose against the U.S. dollar following the announcement, but later gave up some gains as the greenback rallied after the U.S. Federal Reserve cut interest rates by a quarter point with a more hawkish outlook for 2025.

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