Bank of England defies markets by keeping interest rates on hold

Policy makers also updated forecasts for the economy, cutting the outlook for growth and increasing it for inflation

The Bank of England defied market expectations by keeping interest rates on hold, putting concerns about slowing growth above predictions for a spike in inflation.

Policy makers led by Governor Andrew Bailey voted 7-2 to keep the benchmark lending rate at 0.1%, and 6-3 to maintain their bond buying target. Officials also pushed back against market pricing for a series of hikes to 1% next year, noting that path would leave inflation below target at the end of their forecast period.

The pound weakened after the decision, trading 0.8% lower at $1.3572 as of 12:05 p.m. in London. Government bonds surged, while