BOE Holds Rates at 3.75%, Warns of Potential Hike Amid Iran Conflict

The Bank of England has maintained its interest rate at 3.75% for the fifth consecutive time, but indicated that it is prepared to raise rates if the war in Iran persists.

The decision was made after a split vote on the Monetary Policy Committee (MPC), with six members voting to keep the rate steady and three calling for an increase to 4%.

The majority of members felt that holding rates at 3.75% was sufficient protection against the risk of increased global energy prices driving inflation higher later this year, but recognized the potential need for additional policy restraint if further pressures on inflation materialize.

Bank Governor Andrew Bailey said that if the conflict in the Middle East persists and second-round effects emerge, it is likely that the Bank will have to tighten policy to counter inflationary pressures in the UK economy.