Bank of England Holds Rates Amid Ongoing US-Israeli War Inflation Concerns

The Bank of England will keep interest rates at 3.75% for the rest of this year and through mid-2027, according to a Reuters poll of economists.

Despite rising inflation driven by higher energy prices stemming from the ongoing US-Israeli war on Iran, nearly 90% of polled economists expect rates to remain on hold until late next year. The majority of policymakers still believe inflation is not strong enough for a rate hike.

The sharp rise in global bond yields has tightened financial conditions and may further drive up mortgage rates, giving the Bank more room to watch how the economy performs over coming months.