Bank Holds Interest Rates as Energy Prices and Memory Chip Shortage Loom

The Bank of England has held interest rates at 3.75% for the fifth consecutive time, despite concerns that energy prices and a memory chip shortage could drive inflation higher.

In its latest monetary policy report, the central bank warned that high and volatile energy prices caused by the Middle East conflict will contribute to rising inflation later this year.

The Bank predicted that UK inflation will average around 3% this year, before slowing to 2.7% in 2027 and 1.8% in 2028.

A majority of the Monetary Policy Committee (MPC) voted to keep interest rates steady, while three members called for a hike to 4%.