BoE Set to Hold Interest Rates Amid Ongoing Middle East Uncertainty

The Bank of England is expected to hold interest rates at 3.75% next week despite fresh uncertainty in the Middle East, economists have predicted.

A number of experts, including those from Oxford Economics and Nomura, believe that a majority of the Bank's rate-setting committee will opt to keep the current rate, with some predicting another seven-to-two vote in favour of holding.

The recent easing of inflation in the UK, which hit a 15-month low in June at 2.6%, may provide some relief to the Monetary Policy Committee (MPC), but economists warn that prices are expected to rise again as energy costs feed into household bills from July.

Thomas Pugh, chief economist at RSM UK, believes oil prices will largely steer the path of interest rates for the next year, and if they remain close to $100 per barrel over the summer, a September rate hike would move firmly onto the table.