Bank of England set to defy Fed’s rate-hike lead, despite rising inflation

Kevin Warsh, chairman of the US Federal Reserve, and Andrew Bailey, governor of the Bank of England at the Jackson Hole Economic Symposium in Moran, Wyoming, on Aug. 28, 2026.David A. Grogan | CNBCThe Bank of England is widely expected to leave interest rates unchanged on Thursday, despite inflation rising well above its 2% target. Markets are pricing in more than an 80% chance that the central bank will hold interest rates steady on Thursday, according to LSEG data, but a hike of at least 25 basis points is widely anticipated at its next meeting in November. A hold would mark a divergence from other major central banks. The U.S. Federal Reserve announced a quarter-point hike on Wednesday, its first hike since 2023. Last week, the European Central Bank announced its second rate hike this year, after raising rates in June for the first time in three years. The Bank of Japan is expected to raise its key interest rate at the end of its two-day meeting on Friday. The Bank of England has not altered its key interest rate this year. It last changed rates in December, with a 25-basis-point cut. Data released Wednesday showed that the U.K.'s inflation rate rose to 3.1% in August, marking i...