Bank of England Holds Rates Amid Energy Price Concerns

The Bank of England's Monetary Policy Committee (MPC) held its key rate at 3.75%, but the 6-3 split showed officials are increasingly worried that another energy shock could push inflation back up.

According to Reuters, Governor Andrew Bailey said UK inflation pressures look 'on balance more benign', but global conditions feel 'more uncertain and inflationary'. He cited thin European gas inventories and refining constraints as potential triggers for higher fuel costs.

The three policymakers who voted for an immediate hike to 4% argued that acting sooner could reduce the chance of knock-on effects getting entrenched, while Chief Economist Huw Pill wanted to send a clear signal that the bank will respond if inflation risks re-accelerate.