LONDON — The Bank of England concluded its final meeting of the year on Thursday by keeping interest rates on hold after British inflation rose to an eight-month high.

Analysts widely expect to keep rates on hold at the December meeting as policymakers remain concerned Stubborn services inflation and wage growth.

This year the Bank of England has raised the key interest rate from 5.25% to 4.75%, a range of two percentage points.

Contrary to expectations, three members of the Monetary Policy Committee voted for a rate cut, while six members favored leaving it unchanged. Economists polled by Reuters had predicted that only one member would vote for a rate cut.

After the Bank of England announced the news, the pound fell directly against the dollar, rising 0.2% at 12:22 noon. hold widespread rallies On Wednesday, following the Fed Lower interest rates by a quarter of a percentage point But hinted at a more hawkish outlook for 2025. The stock gave back some of its gains Thursday morning.

The Bank of England said in a statement that overall UK inflation rose to 2.6% in November, slightly higher than previously expected, adding that services sector inflation remained “high.”

Bank of England staff also lowered their forecasts for the economy in the fourth quarter of 2024, now predicting no growth, compared with the 0.3% forecast in the November report.

UK economic growth data has been weaker than expected in recent months, with economic growth slowing Unexpected shrinkage of 0.1% October.

Money markets this week scaled back bets on the pace of further rate cuts next year after data on inflation and summer wage growth, now predicting a rate cut of about 50 basis points, down from expectations of about 70 basis points. Monday’s cut was worth it.

“The dovish tone of the split vote decision and the minutes suggests that February’s rate cut will still play an important role even if no agreement is reached,” said Suren Thiru, economics director at the Institute of Chartered Accountants in England and Wales, in emailed comments. .

“The BoE risks getting bogged down by the pace of policy easing, as the timing of future rate cuts could become increasingly complex as inflation threatens to move higher, particularly if stagflation fears materialize.”

This is a breaking news story and will be updated soon.