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Bank of England holds interest rates but hints at possible hikes - TELEGRAPH
UK interest rates have been held at 3.75% but the Bank of England has signalled it was ready to raise borrowing costs should war in the Middle East keep energy prices elevated.
The Bank left rates unchanged in a unanimous vote among all nine members of its Monetary Policy Committee (MPC) on Thursday.
It is the first time that all members have voted the same way since September 2021.
The US-Israel war with Iran had caused a significant spike in global energy prices, which was pushing up fuel costs and could lead to higher household energy bills, the MPC warned.
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It had therefore decided to keep interest rates the same while policymakers assess developments in the Middle East.
But the MPC signalled that if the conflict persists and has a bigger impact on UK prices, it would need to take a “more restrictive policy stance”, which indicates higher interest rates to control inflation.
Governor Andrew Bailey said: “War in the Middle East has pushed up global energy prices.
“You can already see that at the petrol pump and, if it lasts, it will feed into higher household energy bills later in the year.
“The best way to tackle this is at the source by reopening energy supply lines.”
