Bank of England Sticks with 3.75% Interest Rate Amid Middle East Uncertainty

The Bank of England is expected to maintain its current interest rate of 3.75% despite rising uncertainty in the Middle East, according to economists.

A number of experts, including those at Oxford Economics and Nomura, predict a majority vote by the Monetary Policy Committee (MPC) to hold the base interest rate steady.

This comes as inflation eases back to a 15-month low in June, with the UK consumer price index standing at 2.6%, according to the Office for National Statistics (ONS).

However, economists believe that higher energy costs will drive inflation back up later this year, potentially reaching 3.25% by the end of the year.

Thomas Pugh, chief economist at RSM UK, suggests that oil prices will be a key factor in determining interest rates for the next year, stating that if they remain close to $100 per barrel over the summer, a September rate hike is likely.