BOE Set to Hold Interest Rates as Oil Prices Soar

The Bank of England is set to maintain its base interest rate at 3.75 percent during its meeting on July 30, 2026, despite concerns over rising oil prices and renewed conflict in the Middle East.

Oil prices surged above $100 a barrel in late July, driven by the breakdown of a ceasefire between the US and Iran and attacks disrupting shipping routes, causing fears of rising inflation in the UK.

Economists warn that sustained high oil prices could force the Bank to reconsider its forecasts and potentially raise rates later in the year to counter inflationary pressures.

Sanjay Raja, Chief UK Economist at Deutsche Bank, highlighted the risks of prolonged energy supply disruptions, saying 'We see upside risks to the interest rate outlook in the near term, with much dependent on the duration of the unfolding energy shock.'