Bank of England Warns Inflation to Rise Again Amid Ongoing US-Iran Conflict
The Bank of England has warned that UK inflation is set to rise again due to high and volatile energy prices caused by the ongoing US-Iran conflict.
In a regular policy meeting, the BoE decided not to raise its benchmark rate at 3.75 percent for a fifth consecutive time, despite three members voting in favor of a 0.25 percentage point increase to four percent.
Central bank governor Andrew Bailey said that while inflation has fallen faster than expected, 'the conflict in the Middle East continues to mean high and volatile energy prices' which will cause inflation to rise again later this year.
The BoE forecast UK economic growth to remain 'subdued' this year and in early 2027, with inflation peaking at 3.2 percent toward the end of the year before easing slightly.