Bank of England Hedges Against Inflation with Stable Rate Decision

The Bank of England kept its key interest rate at 3.75% for the fifth time this year, as policymakers gave themselves breathing space to assess the fallout from renewed fighting in Iran.

The bank's monetary policy committee voted 6-3 to keep the rate at that level, with most economists expecting the decision.

The split vote highlights growing tensions within central banks around the world about how to respond to stubbornly high inflation and concerns that the war in Iran will lead to another round of price increases.

The bank's policymakers acknowledged the uncertainty surrounding the impact of the energy shock on the UK economy, but three members disagreed, arguing that the potential inflationary effect was too great to ignore.