Middle East Tensions Won't Spark Interest Rate Hike, Oxford Economists Say

Oxford economists predict that the Bank of England will keep interest rates steady at 3.75% next week, despite rising tensions in the Middle East.

The Monetary Policy Committee (MPC) is set to meet on Thursday, July 30, amidst fresh uncertainty in the region and US threats causing inflation concerns.

Oil prices surged above $100 per barrel on Thursday, sparking worries about potential supply disruption in the region. The Bank of England's Governor Andrew Bailey is expected to address how renewed hostilities have influenced the Bank's inflation outlook and rate decisions.

Chief economist Thomas Pugh believes oil prices will largely determine the path of interest rates for the next year, saying 'If they remain close to 100 dollars per barrel over the summer, a September rate hike would move firmly onto the table, with another in the winter likely.'