Stock market today: Dow, S&P 500, Nasdaq rise as oil slips, Fed rate hike pacifies markets' inflation worries

The Bank of England voted to hold its benchmark bank lending rate unchanged at 3.75%, holding steady for now as Governor Andrew Bailey warned that inflationary pressures may push the central bank to hike in coming months.

Three members of the Monetary Policy Committee dissented, splitting the vote along identical lines to the Bank of England’s last meeting as the dissenters called for again for a 25-basis point hike.

European equities ticked up after the decision, pushing the STOXX 600 (^STOXX) index to a gain of roughly 0.4%.

Bailey, voting with the majority to hold rates, acknowledged in a prepared statement that while the UK has so far remained somewhat insulated from global inflationary pressures, that picture could quickly change.

“So far, higher global energy costs have had a limited effect on price and wage setting in the UK,” Bailey wrote. “But the longer this volatility persists, the bigger the impact it will have on inflation, and the more likely it is we will need to raise Bank Rate to ensure that inflation falls back to our 2% target.”

“Whatever happens, we’ll make sure that inflation gets back to the target in the medium term,” Bailey added, echoing comments made by his contemporary across the Atlantic Ocean, Federal Reserve chairman Kevin Warsh, on Wednesday.