Bank of England Holds Rates as Inflation Fears Loom

The Bank of England has decided to hold its interest rates at 3.75%, despite warnings that a hike may be necessary due to inflationary pressures from the conflict in the Middle East.

Six out of nine policymakers chose to leave the rate unchanged, including Governor Andrew Bailey, who stated that the global energy shock so far has had a limited effect on prices and wages in the UK.

However, Bailey also warned that if inflationary pressures intensify, a hike may be needed. He emphasized that 'the longer this volatility persists, the bigger the impact it will have on inflation, and the more likely it is we will need to raise Bank rate.'