Bank Holds Steady as UK Inflation Surprise Fuels Interest Rate Debate

The Bank of England has kept interest rates at 3.75 percent after the UK economy showed better-than-expected results for inflation.

In a split decision, six members of the Monetary Policy Committee (MPC) voted to hold rates steady, while three others wanted a 25 basis point hike.

Catherine Mann was among those who voted for an increase in interest rates, citing the breakdown in relations between the US and Iran as a key factor.

The Bank forecast inflation to remain around 3.2 percent in early 2027 before falling back to target by the end of the year.

However, officials warned that renewed conflict in the Middle East could push energy prices higher for longer, feeding into higher inflation and wage growth.