Bank of England expected to keep main interest rate at 16-year high of 5.25% despite inflation fall

LONDON (AP) — Any hopes the governing Conservative Party may have of the Bank of England cutting its main interest rate from a 16-year high of 5.25% are expected to be dashed. That’s the case even though inflation in the U.K. has fallen back to its target rate for the first time in nearly three years. Official figures on Wednesday, a day before the bank’s expected announcement, showed that inflation as measured by the consumer prices index fell to 2% in the year to May. Despite the welcome decline, some policymakers on the bank’s Monetary Policy Committee appear to be still concerned over the scale of price rises in the crucial services sector and the pace of wage increases.