Bank of England
Britain’s central bank has kept its policy interest rate on hold at five percent, unaffected by the US Federal Reserve’s policy rate cut. The Bank of England’s Monetary Policy Committee decided not to make any changes to the policy rate. Because inflation remains elevated, the possibility of a change in interest rates was already considered low. Data released on Wednesday showed that inflation in Britain remained stable at an annual rate of 2.2 percent in August, which is still above the Bank’s target.
What is the reason?
In fact, the level of inflation in the British services sector is very high, which is negatively affecting its economy. The services sector accounts for about 80 percent of the British economy. The Bank of England had cut policy rates for the first time last month in the wake of the Covid-19 pandemic. It is believed that the British central bank could reduce rates again at the next meeting in November.
Earlier on Wednesday, the US central bank, the Federal Reserve, cut its main interest rate by half a percentage point to around 4.8 percent. This rate remained at 5.3 percent, the highest level in two decades for 14 months. The Fed has also indicated some further cuts in official interest rates in the coming months.
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The Fed has reduced interest rates
The Federal Reserve, the central bank of the United States, the world’s largest economy, has shocked the entire world by cutting interest rates by 50 basis points. After which the total interest rates in the United States have dropped to 5 percent. The Federal Reserve has cut interest rates after 4 years. According to experts, the American Central Bank’s fight against inflation is in a way over. After the American Central Bank, central banks of other countries in the world will also consider cutting interest rates. However, the US Federal Reserve was expected to cut the interest rate by 0.25 percent.
