BoE Keeps Rates Steady Amid Inflation Concerns and Middle East Tensions

The Bank of England has kept its key interest rate at 3.75% for the fifth time this year, in line with economists' expectations. The decision was made after a bigger-than-expected drop in inflation last month gave policymakers breathing space to assess the impact of renewed fighting in Iran.

Despite concerns that the war will lead to another round of price increases, most committee members voted 6-3 to keep the rate at 3.75%. However, three policymakers disagreed, saying the potential inflationary effect of the recent surge in energy prices was too great to ignore.

The UK's inflation rate slowed to 2.6% in June from 2.8% the previous month, but remained above the bank's 2% target for a 21st consecutive month. The renewed attacks by the US and Iran sent oil prices soaring, with Brent crude jumping to over $100 a barrel on July 23.