Bank of England leaves interest rates unchanged to study job market

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Nov. 4 (UPI) — Britain’s central bank on Thursday decided to leave key interest rates alone, partly to see how the job market reacts after the end of an emergency program that subsidized wages.

Most experts expected the Bank of England to raise rates from a record low of 0.1% to about 0.25%.

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Two of the nine members of the bank’s Monetary Policy Committee voted for an increase, due to rising costs and inflationary pressures.

The central bank said it expects rate hikes will be necessary in the coming months

Part of the committee’s reasoning for the delay in raising rates has to do with the recent end of the government’s subsidized salary program, which cushioned workers’ pay during the economic instability of the COVID-19 pandemic.

“There was value in waiting for additional information on near-term developments in the labor market … before deciding when a tightening in monetary policy might be warranted,” the committee said in a statement on its decision Thursday.

In its assessment, the bank also said it expects inflation to peak at about 5% in April.

On Wednesday, the U.S. Federal Reserve also decided to leave interest rates alone, near zero. It also announced plans to phase out its monthly bond purchases, which have been an emergency measure to stabilize the U.S. economy during the pandemic.

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