The UK’s currency, a global benchmark
The Bank of England has voted 8-1 to hold Bank Rate at 3.75% and has published three scenarios showing higher near-term inflation because of the Iran war and energy-price shock. Governor Andrew Bailey has said the path for policy will depend on the size and duration of the energy shock; chief economist Huw Pill has dissented for a 0.25pp rise.
The Bank of England is considering interest rate decisions as energy prices surge due to the Middle East conflict. UK economic growth has been stronger than expected, but inflation risks are rising. Policymakers face a difficult balancing act between supporting growth and controlling inflation.