UK inflation is heading in ‘right direction,’ but Bank of England isn’t ready to cut rates

By PAN PYLAS
Associated Press

LONDON (AP) — The Bank of England has kept its main interest rate unchanged at a 16-year high even though inflation continues to drop from multi-decade peaks. Thursday’s decision to leave the key rate at 5.25% was widely anticipated in financial markets and comes a day after the U.S. Federal Reserve also keep its benchmark rate steady. Unlike the Fed, the Bank of England gave few explicit indications that it’s getting ready to cut borrowing costs soon. Market expectations that lower interest rates are on the horizon got a boost this week with news that U.K. inflation fell to a 2.5-year low of 3.4% in February. That was more than anticipated.