Bank of England holds interest rates at 15-year high despite worries about the economy

LONDON (AP) — The Bank of England has kept borrowing rates unchanged despite mounting worries over the state of the British economy.

The central bank on Thursday left its main interest rate at a 15-year high of 5.25%, where it has stood since August following the end of nearly two years of hikes.

While the interest rate increases have helped in the battle against inflation, the squeeze on consumer spending, primarily through higher mortgage rates, has weighed on British economic growth.

On Wednesday, the United States Federal Reserve also kept rates on hold.

The European Central Bank, which sets policy for the 20 European Union countries that use the euro currency, is expected to do the same Thursday.

The Fed has signalled it expects to make three interest rate cuts next year, while market expectations also foresee cuts by the ECB.

The Bank of England is widely thought to be further away from cutting rates than its counterparts, with inflation in the UK higher than in the US or in the eurozone.

The Bank of England has managed to get inflation down from a four-decade high of over 11% — but there's still a ways to go for it to get back to its 2% target.

Inflation, as measured by the consumer price index, stood at 4.6% in the year to October, still too high for comfort.

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