Bank Holds Rates Steady, Warns of Hike if Iran Conflict Persists

The Bank of England kept interest rates at 3.75% for the fifth consecutive time but hinted that it could raise them if the conflict in Iran persists and global energy prices surge.

The decision followed a 6-3 vote on the Monetary Policy Committee, with six members voting to keep rates steady while three called for an increase to 4%.

Governor Andrew Bailey said that if the Middle East conflict continues, the Bank may need to tighten policy to counter inflationary pressures in the UK economy.

The central bank predicted that UK inflation will average around 3% this year and peak at 3.2% later this year before easing back towards the 2% target.