UK Interest Rates May Rise Amid Middle East Oil Price Surge

UK interest rates may rise due to rising oil prices, economists warn.

The Bank of England's monetary policy committee is expected to vote in favour of holding interest rates at 3.75% on Thursday, but some City experts believe that could change if the conflict in the Middle East continues and oil prices remain high.

A barrel of Brent crude jumped above $100 a barrel (£75) on Thursday before falling back to $96 on Friday, sparking fears that higher prices at the pumps would send inflation soaring.

Sanjay Raja from Deutsche Bank said there are 'upside risks' to interest rate forecasts if airstrikes continue and tanker routes remain blocked. He also stated that a second energy wave would likely amplify uncertainty around the inflation path.