BOE Holds Rates Steady Despite Rising Inflation Risks

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 decision comes despite rising inflation risks, with nearly 90% of economists predicting no change in interest rates this year.

Three members of the Monetary Policy Committee voted for an immediate rate rise to 4.0% at the July meeting, but most expect the central bank to keep rates steady due to the UK economy's resilience since the U.S.-Israeli war on Iran began.

Inflation likely rose to 2.9% in July from 2.6% in June, further above the BOE's 2% target, according to a separate Reuters poll ahead of official data due on Wednesday.

However, the Bank of England expects inflation to rise above 3% later this year, and nearly 90% of economists polled by Reuters expect at least one cut in Bank Rate by the middle of 2027.