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US Federal Reserve decides not to increase interest rates as Bank of England potentially considers similar action in Business News

The Federal Reserve – the US central bank – has decided against raising its base interest rate.

Prior to the UK’s own crucial interest rate decision on Thursday, the Bank of England may potentially take a similar approach.

At the last interest rate meeting in July, the cost of borrowing in the US was brought to a 22-year high after a brief pause in the Fed’s rate hike program.

The aim of the US central bank’s rate increases was to make borrowing more costly, thus curbing inflation by reducing money supply and dampening spending.

Inflation in the United States reached 3.7% in the year up to September, surpassing the Fed’s 2% target and continuing a slight upward trend from the two-year low of 3% recorded in June.

In the UK, the Bank of England may maintain the base interest rate at 5.25% following 14 consecutive increases.

The decision will be announced at 12pm on Thursday.

An unexpected decline in inflation has led analysts to believe that the Bank may have room to ease its rate hikes.

US interest rates range from 5.25% to 5.5%. In the US, the interest rate is represented as a range instead of a single percentage, unlike in the UK, because the Fed does not set a specific figure.

Instead, these figures serve as target rates to guide lenders.

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