BoE Set to Hold Steady on Interest Rates Amid Iran War and Inflation Pressures

The Bank of England (BoE) is likely to keep interest rates steady on Thursday as it weighs the impact of the Iran war and intensified inflation pressures. The BoE's Governor Andrew Bailey has said that previous expected rate cuts are off the table due to the war, which should keep inflation in check.

Unlike the European Central Bank, which raised rates in June, the BoE will likely stick with a 3.75% interest rate, according to most economists polled by Reuters. The U.S. Federal Reserve left rates unchanged on Wednesday, but three of its members wanted a quarter-point rate rise.

The BoE has lowered its inflation forecast to just over 3.25%, citing lower oil price futures despite last week's spike above $100 a barrel. Matthew Ryan, head of market strategy at Ebury, said that neither current oil prices nor recent economic data warrant a hasty response from the BoE.