BOE Set to Hold Interest Rates Amid Rising Inflation Concerns

The Bank of England is expected to keep interest rates unchanged at 3.75% on Thursday, despite inflation reaching a five-month high in the UK.

This decision comes as fuel prices continue to rise due to the ongoing Iran war, causing economists to question whether higher inflation will feed through into underlying prices and wages.

David Rees, head of global economics at Schroders, believes that interest rates will be held steady because the economic backdrop remains relatively soft, particularly in terms of wages and the labor market.

Inflation is currently at 3.1%, above the bank's target of 2%. Economists forecast it to rise further in coming months as households face another energy bill increase in October.