Bank of England holds rates steady, confounding expectations

LONDON — The Bank of England has confounded market expectations and held interest rates steady, saying it wanted to see more information about what happens to unemployment after the government recently ended a program that subsidized worker pay during the coronavirus pandemic.

The decision today to keep the bank’s main interest rate at 0.1% was a surprise amid surging consumer prices. Financial markets had been increasingly pricing a rate rise to 0.25% over recent days, prompting some mortgage lenders to withdraw some of their cheapest loans.

In a statement, the rate-setting Monetary Policy Committee said there was “value” in waiting for further information in the labor market following the end of the government salary program.

The vote was 7-2 in favor of keeping rate unchanged. The two members who voted for a hike said it was necessary because of strong domestic and global cost pressures.