The Federal Reserve has again held interest rates – ahead of a Bank of England announcement on Thursday in which it is widely expected to do the same.

The US central bank said there was no immediate need for a hike because inflation had “eased over the past year,” as it also suggested borrowing costs would fall in 2024.

Officials kept the rate at its current 22-year high of 5.25% to 5.5% for the third time in a row on Wednesday. Unlike in the UK, the figure is always a range to guide lenders, rather than a single percentage.

Fed chair Jerome Powell told a press conference that rates were “likely at or near” their peak, but said the bank was still moving cautiously as “no one is declaring victory” yet.

He added: “Inflation is still too high and ongoing progress in bringing it down is not assured.”

Fed officials also forecast that rates will likely be cut to 4.6% by the end of next year.

The Bank of England is due to announce its latest decision on interest rates at noon on Thursday.

Most economists predict there will be no change from last month when the figure was held at 5.25% for the second consecutive time.

Financial markets have also priced in an almost 100% chance of a hold, according to the London Stock Exchange.

Read more from business:
Former BP boss stripped of £32m

UK economy in surprise decline in October
Tesla recalls more than two million cars

It comes as both the US and UK central banks battle to bring down inflation. It eased sharply in the UK to a two-year low of 4.6% in figures released last month.

Julien Lafargue, from Barclays Private Bank, said: “Although the vote will likely still be split, we expect the Bank of England (BoE) to maintain [rates] at 5.25%.

“In our view, the Monetary Policy Committee will also likely reinforce its message that the current monetary policy stance is restrictive but that, with risks to inflationary pressures being tilted to the upside, it’s too early to think about interest rate cuts.”

He added that markets had priced in an expectation that the Bank would begin cutting rates around June 2024.

Please use Chrome browser for a more accessible video player


From November: ‘Inflation is still too high’

Nicholas Hyett, from investment firm Wealth Club, said he also expected no change.

He added: “The question now is when the Bank starts cutting rates. Leave it too long and the cure could yet prove worse than the disease.”

Articles You May Like

Israel has made ‘big mistakes’ in Gaza conflict, says Dowden
Rich NYers drive up Florida country club membership fees to over $1M: 'A luxury golf arms race'
Migraine pill which could help 170,000 sufferers given NHS green light
Insurance companies use drones and high-altitude balloons to spy on homes and deny coverage: report
Soros fund tightens grip over US radio waves after seizing control of bankrupt Audacy