Bank of England Holds Rates Steady, Warns of Higher Hurdle Ahead

The Bank of England held interest rates steady at 3.75%, despite inflation reaching 3.1% in August, well above its 2% target.

The central bank now expects price rises to nudge past 4% early in 2027, a chunky upgrade on the 3.2% peak it had forecast in July.

The BoE is wary of reacting before seeing evidence that high inflation is settling in for the long haul.

However, the bank warned that the ongoing Middle East war might force it to 'tighten policy', which means higher rates are likely on the horizon.