BoE Keeps Rates Steady Amid Middle East Oil Price Volatility

The Bank of England has kept interest rates at 3.75% for a fifth consecutive meeting, citing uncertainties caused by the ongoing conflict in the Middle East.

Although inflation is expected to rise due to volatile oil and gas prices, the peak will be slightly lower than previously forecast, reaching 3.2% in 2026 in a worst-case scenario where oil prices reach $100 a barrel.

The UK economy is expected to grow by 1.1% this year, ahead of forecasts made in April, but major uncertainties remain due to the conflict and other global factors such as droughts and the prospect of a 'super El Niño' weather pattern.