BoE Set to Hold Rates Steady Amid Oil Price Volatility

The Bank of England is expected to keep interest rates steady at 3.75% on Thursday, despite recent spikes in oil prices above $100 a barrel and concerns about inflation.

British inflation has been below the BoE's forecasts, dropping to a 15-month low of 2.6% in June, and is currently lower than in the US and the euro zone.

Economists polled by Reuters and financial markets agree that there is no chance of a rate rise this week, but are divided on the longer-term outlook, with some predicting a hike as soon as September or November.

BoE Chief Economist Huw Pill fears a second oil price shock in four years could lead to higher inflation expectations for households and businesses, but Governor Andrew Bailey has stated that the BoE does not need to raise rates like the ECB because it cut them by less before the Iran war started.