Bank of England Keeps Benchmark Interest Rate at 0.1%

The Bank of England held its benchmark interest rate steady Thursday and said it expects annual inflation to reach 4% in the final quarter of the year.

The pickup in inflation will prove temporary, the central bank’s Monetary Policy Committee said, with price-growth expected to slow to its 2% target in the next two to three years.

The panel voted unanimously in favor of maintaining the policy rate at 0.1% but one policy maker, Michael Saunders, voted to lower the target for the BOE’s government bond buying program to 830 billion pounds ($1.153 trillion), from its current GBP875 billion. Mr. Saunders argued continuing with the current program risked a more sustained overshoot of the BOE’s 2% inflation goal.

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