BoE Set to Hold Rates as Inflation Expectations Rise Amid Middle East Tensions

The Bank of England is expected to maintain its interest rates despite rising tensions in the Middle East and US threats, which have reignited concerns over inflation.

Economists predict a majority of the Bank's rate-setting committee will keep the base interest rate at 3.75 per cent, with some forecasting another seven-to-two vote in favour of holding the current rate.

The decision comes as the UK consumer price index inflation eased back to a 15-month low in June, at 2.6 per cent, according to the Office for National Statistics.

However, inflation is now widely expected to swing back higher and further away from the Bank's two per cent inflation target, with some predicting it will rise back to 3.25 per cent later this year due to higher energy costs feeding into household bills from July.