Dec 14, 7:12 AM EST

Bank of England holds rates after first hike in decade

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LONDON (AP) -- The Bank of England kept its main interest rate unchanged at 0.50 percent on Thursday, a month after increasing borrowing costs for the first time in a decade to contain a rise inflation stoked by last year's Brexit vote.

The decision was widely anticipated even though figures earlier this week showed annual inflation rising further above the 2 percent target to 3.1 percent. All nine members of the Monetary Policy Committee voted to keep rates unchanged.

Policymakers at the bank are predicting inflation to ease back next year as the initial impact of the pound's fall following the vote to leave the European Union - it raised the price of imported goods like food and energy - fades.

They are also wary of raising rates too much given the economic uncertainty surrounding Brexit, due to take place in March 2019.

The minutes to the policy meeting showed that the committee remained of the view that were the economy to follow the path anticipated in November's quarterly economic projections, then "further modest increases" in interest rates "would be warranted over the next few years, in order to return inflation sustainably to the target."

However, the committee stressed that any future increases are expected to be "gradual" and "limited."

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