Divided Bank of England holds key interest rate at 4% despite hopes inflation has peaked

LONDON (AP) — The Bank of England appeared deeply divided Thursday as it kept its main interest rate unchanged at 4%, with a wafer-thin majority of policymakers needing more information on how swiftly inflation will fall back towards their target before backing another cut in borrowing costs.

The decision by the nine-member rate-setting body to maintain Bank Rate — a benchmark for mortgages as well as consumer and business loans — was widely anticipated, though some economists thought there was a chance that borrowing rates would be reduced by a further quarter of a percentage point to 3.75%.

Like the U.S. Federal Reserve, which last week cut interest rates for the second time this year, the vote among on the bank's Monetary Policy Committee was tight, with five voting for unchanged rates and four backing a cut.

“We still think rates are on a gradual path downwards, but we need to be sure that inflation is on track to return to our 2% target before we cut them again," said Bank Governor Andrew Bailey, who had the deciding vote.

Thursday’s decision was the first time the Bank of England has departed from the quarterly pace of cuts since it started cutting borrowing rates in August 2024 after the unwinding of the previous spike in inflation in the wake of Russia’s invasion of Ukraine.

The main reason why rates were kept on hold is that the annual rate of consumer price inflation is standing at 3.8%, nearly double the bank's target, and the highest level among the Group of Seven leading industrial nations.

In minutes accompanying the decision, the rate-setting panel said inflation has likely “peaked” at a lower level than its previous prediction of 4% in August, when it last cut interest rates to 4%.

With inflation set to fall in coming months and possibly back to the target next year, many economists think a cut is possible at the next rate-setting meeting in December.

“Today’s decision clearly opens the door to a December cut, but that remains contingent on the incoming data," said Matt Swannell, chief economic advisor to the EY ITEM Club.

Much could hinge on the U.K. government's budget on Nov. 26, which is expected to be one of the most consequential in years as Treasury chief Rachel Reeves seeks to plug a hole in the public finances.

Reeves has put the country on notice that taxes will likely have to be raised in the budget, which could have a depressing effect on an already moribund economy and therefore prices. She has also indicated that one of the key missions of her budget will be to get inflation lower.

“At the budget later this month I will take the fair choices that are necessary to build the strong foundations for our economy so we can continue to cut waiting lists, cut the national debt and cut the cost of living," Reeves said after the bank's decision.

Bank of England Deputy Governor for Monetary Policy, Clare Lombardelli, gestures during the Monetary Policy Report news conference, in London, on Thursday, Nov. 6, 2025. (Maja Smiejkowska/Pool Photo via AP)

Andrew Bailey, Governor of the Bank of England, attends the Bank of England Monetary Policy Report news Conference, at the Bank of England, in the City of London on Thursday Nov. 6, 2025. (Maja Smiejkowska/PA via AP)

Andrew Bailey, Governor of the Bank of England, attends the Bank of England Monetary Policy Report news Conference at the Bank of England in London, England, Thursday Nov. 6, 2025. (Maja Smiejkowska/PA via AP)

The Bank of England in London, Thursday, Aug. 1, 2024. (AP Photo/Alberto Pezzali, File)

INDIANAPOLIS (AP) — From the moment Curt Cignetti took Indiana's head coaching job, he made it clear this would be a different program.

He refused to tolerate any moral victories or close calls and instead expected to win, to win big and win immediately.

In just 737 days, he turned what had been the Football Bowl Subdivision's losingest program into the nation's No. 1 seed heading into the playoffs, a legitimate championship contender and a Big Ten champion for the first time since 1967.

“I think we were a year late,” he joked as the trophy presentation began following Saturday night's 13-10 win over No. 1 Ohio State.

To the rest of the college football world, Cignetti's incredible turnaround has come so quickly, it's likely to lift the expectations of every program in America.

He took over a team that had endured three consecutive losing seasons since qualifying for a bowl game and brashly dared anyone who thought he couldn't win to Google him. The former Nick Saban assistant delivered quickly, winning a school record 11 games and taking the Hoosiers to their first playoff appearance in Year 1.

The doubters didn't think Cignetti or the Hoosiers could come anywhere near replicating that kind of success this season.

But they've been ever better in 2025. At 13-0, the Hoosiers are the last unbeaten team in major college football. They could even be facing his former school, Sun Belt Conference champion James Madison (12-1) in the quarterfinals.

By beating the Buckeyes (12-1) in Indianapolis, they ended the nation's longest active winning streak at 16. When they beat then No. 3 Oregon (11-1) in October, they ended the nation's longest active regular season winning streak and the nation's longest active home winning streak.

In between they shed the label of FBS' losingest program, gladly handing the title to Northwestern. And now they have their first win over Ohio State since 1988, snapping a 30-year losing streak by winning their first conference crown in more than half a century.

Not enough? Cignetti earned his second straight Big Ten Coach of the Year Award this week, Fernando Mendoza became the first Hoosier to be named the Big Ten's top quarterback since 2001, and Mendoza also appears poised to become the first Indiana player to win the Heisman Trophy after adding two more signature moments to his resume.

His perfectly placed 17-yard TD pass to Elijah Sarratt on the sideline gave Indiana a 13-10 lead midway through the third quarter, and he sealed the win with an incredible 33-yard pass to Charlie Becker on third down with about two minutes to go — all after getting hurt on the first play of the game.

“Although I got hit, I never was going to stay down,” Mendoza said. “I’d die for my brothers on that field.”

Naturally, the brash-talking Cignetti went for it, too, and Mendoza made him look like a genius.

“I wasn't going to play not to lose,” Cignetti said.

How good has Indiana been during his two-year tenure?

They are now 24-2, the only losses coming at Ohio State and at Notre Dame last season, the two teams that played in the national championship game. Cignetti and his players have each spoken about what they learned from those experiences and how it helped steel them for the mission they've been on this season, and he's already had his contract extended twice.

Indiana heads into the playoffs with an offense and defense ranked the top five in scoring and that managed to beat Ohio State at its usual game — physically playing keep away, wearing down opponents and holding them out of the end zone.

Now a new journey begins for Cignetti and a school far more renowned for winning national titles in men's basketball, men's soccer and swimming and diving. Football has never come close — until now. And these Hoosiers believe they have what it takes to continue what seemed unthinkable just two years ago.

“It means a lot, we played for each other,” linebacker Isaiah Jones said of winning the championship. “For any of the doubters out there, this was the final nail in the coffin.”

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Indiana's Fernando Mendoza celebrates after the Big Ten championship NCAA college football game against Ohio State in Indianapolis, Saturday, Dec. 6, 2025. (AP Photo/AJ Mast)