UK Interest Rates Held as Iran War Rises Concerns for Future Hike

The Bank of England has kept interest rates at 3.75% for the sixth consecutive time, but policymakers are warning that rising global energy costs could lead to a future hike.

The decision was made by the monetary policy committee (MPC), which voted 6-3 to keep borrowing costs steady.

However, Governor Andrew Bailey stated that while global energy prices have had a limited impact on UK inflation so far, their volatility will eventually lead to higher prices and wages.

This could necessitate a rate increase to ensure inflation returns to the 2% target.