BoE Holds Rates at 3.75% Amid Uncertainty Over Iran Conflict

The Bank of England kept interest rates at 3.75% on Thursday in a 6-3 vote, despite concerns over rising energy prices due to the conflict in the Middle East.

Central bank Governor Andrew Bailey said that while domestic inflation is moderating, the recent escalation in tensions involving Iran has made it harder to predict near-term inflation trends.

Bailey emphasized that volatile oil and gas prices remain a key risk factor, as seen with crude oil prices climbing back above $90 a barrel this week.

The committee acknowledged that prolonged energy price increases could eventually trigger second-round effects through wages and broader price-setting behavior, but noted there is little evidence so far of such effects emerging.