BoE Sees No Rate Hike Despite Oil Price Spike

The Bank of England is set to keep interest rates steady at 3.75% on Thursday, despite concerns over oil prices above $100 a barrel.

A recent spike in oil prices has raised questions about whether the BoE will raise borrowing costs, but economists polled by Reuters and financial markets do not see any real chance of a rate rise this week.

However, there is a sharp split on the longer-term outlook, with some expecting a quarter-point BoE rate rise in September and others predicting almost three moves by next June. Even after oil prices fell to $90 a barrel on Monday, markets still fully priced in a rate hike by November.

The BoE's Chief Economist Huw Pill has expressed concerns that households and businesses may expect higher inflation for years to come due to the second oil price shock in four years.