The Bank of England has an interest rate of 4.75%

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The Bank of England has kept interest rates at 4.75 percent, after inflation rose in November.

The Monetary Policy Committee’s decision, which was in line with the forecasts of economists polled by Reuters, comes a day after the latest data showed UK inflation rose to 2.6 percent last month from 2.3 percent in October.

Many of those who set prices have said that the recent increase in wages and price growth “increased the risk of persistence of inflation”.

But three out of nine members of the MPC – deputy governor Dave Ramsden, Alan Taylor and Swati Dhingra – voted for a one-point cut citing sluggish demand and a weak labor market.

BoE staff now expect zero growth in the final quarter of this year, lower than forecast in November.

“Many of the UK’s most recent indicators have declined,” the bank said on Friday.

It added that risks to global growth and rising global inflation and trade policy uncertainty “have grown significantly” – which is a reflection of US President-elect Donald Trump’s desire to raise US tariffs.

The pound fell to $1.259 after the BoE decision, although it was up 0.2 percent on the day.

The yield on the government’s two-year bond, which is linked to two-year rates, fell slightly to 4.46 percent, on the same day, analysts said, citing an unexpected increase in opposition within the MPC.

The BoE cut rates by a quarter at its previous meeting in November, but indicated at the time that further cuts were unlikely until 2025. It has cut rates twice in 2024.

Traders have also been expecting a reduction next year. Immediately ahead of Thursday’s MPC meeting, investors were betting on two quarterly rate hikes next year. In October they were expecting four.

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