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The Bank of England's decision to leave interest rates unchanged has drawn sharp criticism from financial market analysts, with deVere Group Chief Executive Nigel Green warning that the country’s policymakers risk falling behind in the fight against inflation while other major central banks continue to tighten monetary policy.

The Bank's decision came hours after data showed UK inflation rose to 3.1 per cent in August, marking the first time the rate has exceeded 3 per cent since March. The move also follows a rate increase by the US Federal Reserve, which raised its benchmark interest rate to a range of 3.75 per cent to 4 per cent, while the European Central Bank last week lifted rates to 2.5 per cent. Market observers are also anticipating a policy move from the Bank of Japan in the coming days.

Green argued that the Bank of England's decision contrasts sharply with action being taken by its global counterparts.

"Every major central bank at the table is acting except one: the feet-dragging Bank of England," he said.

"The Fed has moved. The ECB has moved. The Bank of Japan looks ready to move. The Bank of England is choosing stillness while inflation runs hot, and stillness has a cost."

He warned that Britain is particularly vulnerable to inflationary pressures because of its dependence on imported energy. According to official data, motor fuel costs surged 23 per cent year-on-year in August, contributing significantly to the latest rise in inflation.

"Britain imports too much of its energy to treat fuel-driven inflation as background noise," Green said. "When petrol does the damage it's done this month, waiting for a tidier picture is how a central bank gets overtaken by events."

The deVere chief also pointed to rising government borrowing costs as evidence of growing market concern. Yields on 20-year and 30-year UK government bonds, or gilts, have approached 6 per cent, among the highest levels in the G7.

Reports suggesting that the Bank of England could pause sales of long-dated gilts alongside its rate decision would do little to address underlying inflation pressures, he argued.

"Gilt yields near 6 per cent carry real weight. They're a sign that bond markets are losing patience with a country importing inflation risk while seeming to import indecision too," Green said.

"Pausing long gilt sales might settle nerves for a week. It doesn't touch the inflation question sitting in front of policymakers."

He further warned that the inflationary impact of higher energy prices linked to the US-Iran conflict continues to ripple through supply chains, increasing costs for businesses and households.

Green also highlighted the potential consequences for the pound and wider UK financial markets if the Bank of England continues to diverge from the policy direction of other major central banks.

"Every meeting the Bank of England holds while the Fed, the ECB and the Bank of Japan move widens the gap. Markets always find a way to price it in," he said.

"It shows up in the currency, in gilts, or in the credibility of the inflation target itself."

Looking ahead, Green said the case for a rate increase at the Bank's next meeting had become increasingly compelling.

"A November hike is looking less like an option and more like an obligation," he said.

"The longer the Bank of England waits to catch up with the rest of the world, the sharper the adjustment it will eventually have to make."

The Bank of England has maintained that its policy decisions will remain data-dependent as it seeks to balance slowing inflationary pressures with concerns over economic growth. However, with inflation once again moving further above its target, pressure is likely to intensify on policymakers to resume interest rate increases in the months ahead.