BoE Keeps Rates on Hold Amid Energy Price Crisis Fears

The Bank of England (BoE) kept its base rate at 3.75% in its latest decision, despite warnings that interest rates will have to rise unless the Middle East crisis eases.

Governor Andrew Bailey said rising global energy costs are having a 'limited effect on price and wage setting in the UK', but added that if this volatility persists, it will likely lead to higher inflation and increased pressure on interest rates.

The Monetary Policy Committee (MPC) voted 6-3 to keep interest rates on hold at its latest meeting, with some members arguing that the case for raising interest rates is building due to the ongoing conflict in the Middle East.

The BoE also partly suspended quantitative tightening, a process of unwinding assets created during the Credit Crunch, and will pause all sales until April pending consultations on selling gilts directly to the Treasury's Debt Management Office at market prices.