BOE to Hold Rates Amid Energy Price Fears

The Bank of England is expected to keep interest rates unchanged at its next meeting on September 17, but economists warn that policymakers 'need to be ready' to hike rates if energy prices continue to surge.

Most experts predict the Monetary Policy Committee (MPC) will hold rates at 3.75% for the sixth time this year, following a 'wait-and-see' approach particularly regarding the Middle East conflict's impact on the UK economy.

However, three members of the MPC - Huw Pill, Megan Greene, and Catherine Mann - voted to hike rates to 4% at the last meeting, and economists expect them to favor an immediate rate increase again.

Rising inflation, driven by a strengthening economy and energy price increases, could prompt policymakers to raise interest rates in the months ahead. Economists predict that if energy prices continue to rise, inflation may peak at almost 4% in 2027.