BoE Threatens Rate Hike If Energy Prices Refuse to Budge

The Bank of England has kept interest rates on hold at 3.75% in its latest decision, but with a clear message that it's prepared to hike them if energy prices don't come down.

The bank voted 6-3 in favor of holding rates steady, but the majority of policymakers are ready to reconsider their stance if energy costs continue to soar.

In a statement, James Smith, Developed Markets Economist at the Bank of England, noted that the decision to hold rates will depend on energy prices over the next six weeks.

If energy prices cool down during this period, the bank's base case is for no rate hike. However, if they remain high, policymakers expect a rate increase in November and possibly in February as well.