Bank of England keeps interest rates at 3.75% as Iran conflict weighs on economy
Policymakers said weak output and higher energy costs kept the case for tighter policy limited, while inflation is still expected to rise above 3.25% this year.
- On Thursday, the Bank of England's Monetary Policy Committee held its key interest rate at 3.75%, matching market expectations with LSEG data showing a 96% chance of no change ahead of the decision.
- Policymakers noted that inflation cooled to 2.8% in May, though the drop stems from a temporary energy price cap change set to rise by 13% later this summer, leaving the economy vulnerable.
- Seven of the nine-person MPC voted to maintain the rate, while two members preferred a hike. Governor Andrew Bailey said, "Oil prices have fallen in recent days, and that s encouraging."
- Meanwhile, the Bank of Japan lifted its policy rate to 1% on Tuesday, a 31-year high, while the European Central Bank recently raised rates to combat the energy crisis.
- MPC projections show inflation remaining under 3% for three months before potentially rising, while Donald Trump's agreement with Iran securing 60-day passage through the Strait of Hormuz provides geopolitical relief.
87 Articles
87 Articles
Bank of England Holds Rates at 3.75 Percent as Middle East Energy Fears Ease
The Bank of England (BoE) held interest rates at 3.75 percent on Thursday as policymakers weighed easing Middle East tensions against high inflation and uncertainty over global energy prices. The decision came just after President Donald Trump signed a deal with Iran to end the conflict, a development which BoE Governor Andrew Bailey said he was “very encouraged” by. The United States and Iran agreed on a memorandum of understanding on June 17, …
Bank of England holds interest rates at 3.75% as inflation pressures ease
London: The Bank of England has kept its main interest rate unchanged at 3.75 percent, as inflationary pressures in the UK economy show signs of easing.The decision was widely expected after recent data indicated that inflation remained steady at 2.8 percent in May, rather than rising as previously anticipated.Inflation outlook improvesAlthough inflation remains above the Bank’s 2 percent target, the latest figures suggest that price pressures m…
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Belfast TelegraphBase rate hold ‘will pave way for mortgage lenders to cut rates in weeks ahead’
Experts said borrowers could benefit from a gradual improvement in mortgage deals over the summer. Mortgage lenders could be encouraged to make more rate cuts in the coming weeks, while savers could also have a “valuable window of opportunity” as the Bank of England base rate remains on hold, finance experts have suggested. The base rate was kept at 3.75% as the Bank cautioned that the cost of living was still set to rise this year amid the fall…
Maintenance was approved by the Monetary Policy Committee by 7 votes to 2, with members opposed to the decision advocating an increase to "help anchor inflation expectations"
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