BOE Holds Rates Steady Amid Rising Inflation Fears

The Bank of England is expected to keep interest rates unchanged at 3.75% for the remainder of the year, according to a strong majority of economists polled by Reuters.

This view has been held since the US-Israeli war on Iran began in late February, and it's based on the UK economy remaining mostly resilient despite higher energy prices.

However, inflation is forecast to rise above 3% later this year, according to the BOE's quarterly forecasts. In fact, a separate Reuters poll predicts that inflation likely rose to 2.9% in July from 2.6% in June.

Despite this, nearly 90% of economists polled by Reuters expect the Monetary Policy Committee to leave rates unchanged at 3.75% this year, with six expecting a hike and two forecasting a cut.