The Bank of England announced its surprise decision to keep interest rates steady despite the continuously increasing inflation rate in the country. The central bank decided to wait and see the situation of the labour market as the government ended a subsidised worker pay program.

The current main interest rate at the Bank of England stands at just 0.1 percent.

The BoE follows on the track of several other central banks that have decided not to raise interest rates just yet. While critics have spoken against the move, highlighting purported risks of high inflation and consumer costs, most central banks have adopted a wait and watch approach.

European Central Bank recently said that it will likely not raise its interest rates in 2022. “In our forward guidance on interest rates, we have clearly articulated the three conditions that need to be satisfied before rates will start to rise," said ECB president Christine Lagarde.

“Despite the current inflation surge, the outlook for inflation over the medium term remains subdued, and thus these three conditions are very unlikely to be satisfied next year," she added.

ECB’s key interest rate has remained fixed at -0.50 percent for deposit facilities.

Across the ocean, the US Federal Reserve has also stayed put on interest rates as it still considers inflation to be transitionary. The Feds have announced the start of the tapering of the asset purchasing program in the country. The country’s interest rate currently remains at 0.15 percent.

The Bank of Japan has also kept its interest rates unchanged, highlighting the low consumer inflation as demand remains sluggish in the country. The bank currently offers -0.1 percent interest rates on short-term deposits.

India’s RBI has also not decided to increase its interest rates last month as well. The benchmark repo rate was 4 percent, while the reverse repo rate was 3.35 percent.

The global move from central banks across continents highlights the growing economic consensus that the current inflationary pressure remains only transitionary.

(Edited by : Thomas Abraham)